11 August 2017, Sweetcrude, Lagos — The local and international financial markets, products and services update.
NIGERIA: The Minister of Budget and National Planning, Udo Udoma, on Thursday promised that the Federal Government would do everything in its power to ensure that the 2018 Appropriation Bill is submitted to the National Assembly in October as earlier promised.
Udoma said this in an interview with State House correspondents during a retreat on the implementation of the Economic Recovery and Growth Plan and the 2018 budget preparation process, held at the Presidential Villa, Abuja.
He said the document would be sent to the lawmakers close to their resumption. He added that the government would stick to its commitment on the 2018 budget.
FX: The I&E opened yesterday at the indicative level of $/N 366.79 and bids were seen around the $/N 367 levels before the market went south and awash with USD liquidity. The window was buoyed by decent offers in the range of $/N 363.50 – 366.00. The market was scrounging for bids which had pretty much disappeared.
FIXED INCOME: The Finance Minister’s comments dominated Yesterday’s trading activities. $3bln worth of t-bills is to be refinanced with dollar debt instead of being rolled over (as is the case currently). Though no time frame was given, this means that local supply will be reduced to manage the cost of borrowing. Yields opened tighter in both bonds and bills as street digested the news. Money market’s N86bn short position eventually weighed in more and pushed bill yields back up. N16.8bn was sold at Yesterday’s OMO.
CHINA: China should remain neutral if North Korea launches an attack that threatens the United States, a Chinese state-run newspaper said on Friday, sounding a warning for Pyongyang over its plans to fire missiles near the U.S. Pacific territory of Guam.
The comments from the influential Global Times came after U.S. President Donald Trump stepped up his rhetoric against North Korea again on Thursday, saying his earlier threat to unleash “fire and fury” on Pyongyang if it launched an attack may not have been tough enough.
China, North Korea’s most important ally and trading partner, has reiterated calls for calm during the current crisis. Beijing has expressed frustration with both Pyongyang’s repeated nuclear and missile tests and with behaviour from South Korea and the United States, such as military drills, that it sees as escalating tensions.
U.S.: President Donald Trump stepped up his campaign of pressure on North Korea, warning the regime not to follow through with a missile test near Guam and promising a massive response to any strike against the U.S. or its allies.
“They should be very nervous, because things will happen to them like they never thought possible, OK?” Trump told reporters Thursday in Bedminster, New Jersey. “He’s been pushing the world around for a long time,” referring to North Korean leader Kim Jong Un.
Trump stood by his threat Aug. 8 to bring down “fire and fury” on North Korea, saying that the statement maybe “wasn’t tough enough.” He declined to rule out a preemptive strike on Pyongyang, saying, “We’ll see what happens.”
COMMODITIES: The key sign of OPEC’s success may finally be here. Since the Organization of Petroleum Exporting Countries embarked on its strategy to clear a global glut, analysts from Goldman Sachs Group Inc. to Bank of America Corp. have said that one critical indicator would show the plan is working: the discount on immediate crude would turn into a premium. That condition known as backwardation signals demand is outpacing supply.
Macro Economic Indicators
Inflation rate (Y-o-Y) for June 2017 16.10%
Monetary Policy Rate current 14.00%
FX Reserves (Bn $) as at August 08, 2017, 31.222
Money Market Highlights
30 Day 18.0908
90 Day 21.1071
180 Day 23.1588
USD 1 Month 1.22889
USD 2 Months 1.26000
USD 3 Months 1.30917
USD 6 Months 1.45222
USD 12 Months 1.72400
Tenor Maturity Yield (%)
91d 09-Nov-17 19.45
182d 15-Feb-18 20.47
364d 26-Jul-18 22.23
2y 12-Jul-19 17.11
3y 12-Jul-20 16.43
5y 27-Jan-22 16.36
Indicative Currency Exchange Rates
USDNGN 314.50 315.00
EURUSD 1.1654 1.1856
GBPUSD 1.2878 1.3080
USDJPY 109.17 109.20
GBPEUR 1.0941 1.1145
USDZAR 13.3528 13.5560
EURNGN 428.54 429.90
GBPNGN 473.28 474.67