31 July 2017, Sweetcrude, Lagos — The local and international financial market products and services update.
NIGERIA: As a half year, 2017 (H1’17) earning reports continue to roll into the market, analysts have said that the market will witness another mix trading this week. The market halted a four-day rally on Friday leading to loss of 1.02% in the All Share index, ASI, at week close, a development that broke the 16 sessions of a continuous bullish run.
Investment analysts said that the equities market would mirror this same trend this week.
FX: Total turnover in the I & E window last week was $1.04bn with 66% traded in the range of $/N 370- 372. The highest turnover in a single session was recorded on Thursday and chatters suggest that the turnover was buoyed by an inflow of circa $150m between the $/N 370-372 levels. $195m sold at the CBN auction last week and the results of the retail auction is yet to be released.
FIXED INCOME: Very quiet end on Friday with only a handful of trades going through. With the CBN system issue still on, there will be no active trading for the first three days of next week. T-Bill auction on Wednesday – On offer is N29.14bn of 91 day, N80bn 182 day and N120bn 364 day. With FAAC inflows coming into the market, we still expect activities to slow down.
E.U: Mario Draghi kept expectations low for inflation this summer, and July’s number is proving him right.
Consumer-price growth in the euro area stayed at 1.3% — enough to argue that deflation risks have disappeared, but too little to meet the European Central Bank president’s goal of just under 2%. While it confirms Draghi’s prediction that inflation would remain near June levels in the coming months, it also reinforces his assessment that, despite better economic growth, there isn’t yet a self-sustained upward trend.
Monday’s report comes as policy makers gear up for an autumn debate on the future path of ECB policy. But unlike confidence at a decade high and accelerating economic growth, it doesn’t offer an obvious argument why asset purchases should be phased out next year, as widely predicted by economists and investors.
U.K: The semblance of unity behind a life-as-normal and business-as-usual Brexit didn’t last. With Prime Minister Theresa May away on holiday, her chancellor of the exchequer went out on a limb to say a consensus was forming around a three-year transition phase, during which little would change about Britain’s relationship with the European Union even past 2019 when the two sides formally break up.
But that vision of harmony was shattered almost immediately. Trade Secretary Liam Fox used a Sunday Times interview to pour cold water on Philip Hammond’s claims that he and other senior ministers had gone soft and agreed to allow the free movement of people to last beyond the two-year negotiations.
COMMODITIES: Oil in New York briefly rose above $50 for the first time since May after OPEC said the group and its partners will meet next week to discuss why some nations are falling behind on their pledge to cut production.
Futures gained as much as 0.7% after surging 8.6% last week. The Abu Dhabi meeting, co-chaired by Kuwait and Russia, is set to take place after Saudi Arabia said last week it would step up pressure on countries that aren’t complying. The U.S. is said to be considering increasing sanctions against Venezuela’s oil industry, the Wall Street Journal reported, citing two people familiar with the deliberations.
Macro Economic Indicators
Inflation rate (Y-o-Y) for June 2017 16.10%
Monetary Policy Rate current 14.00%
FX Reserves (Bn $) as at July 27, 2017, 30.743
Money Market Highlights
30 Day 16.9946
90 Day 20.6878
180 Day 22.3551
USD 1 Month 1.23167
USD 2 Months 1.25833
USD 3 Months 1.31056
USD 6 Months 1.45500
USD 12 Months 1.72400
Tenor Maturity Yield (%)
91d 26-Oct-17 18.84
182d 25-Jan-18 19.67
364d 19-Jul-18 22.89
2y 12-Jul-19 16.91
3y 12-Jul-20 16.42
5y 27-Jan-22 16.18
Indicative Currency exchange Rates
USDNGN 314.50 315.00
EURUSD 1.1632 1.1834
GBPUSD 1.3025 1.3227
USDJPY 110.56 110.59
GBPEUR 1.1085 1.1289
USDZAR 13.0306 13.2371
EURNGN 378.02 379.37
GBPNGN 422.96 424.35