08 September 2017, Sweetcrude, Lagos — The local and international financial market products and services update.
NIGERIA: Director General, Manufacturers Association of Nigeria, MAN, Mr. Segun Ajayi-Kadiri, has said that energy cost accounts for 40% of production cost in the manufacturing sector.
Ajayi-Kadiri disclosed this at the fifth workshop of the pilot Energy Efficiency Network, EEN in Lagos where he underscored the need for energy efficiency in the manufacturing sector, adding that efficient energy consumption is a critical factor for sustainable and profitable business.
FX: The pattern was unchanged yesterday in the I&E window with trades concentrated in the $/N 357 – 363 range. A quick analysis of turnover shows turnover in the window as MTD $295.3mio.
FIXED INCOME: Surprisingly, decent demand on the 91-day despite it trading higher in the secondary market yesterday. The tone in bill market still felt well bid though not as aggressive as Wednesday. We expect demand on bills to slow also as Naira debits for FX auctions are still expected. The bond market opened on some profit taking as street considered Wednesday’s moves overdone. Q4 bill auction calendar still expected. N60bn was sold at yesterday’s OMO.
E.U.: The European Central Bank’s scenarios for its asset purchases after 2017 could be implemented without adjusting the parameters of the program, according to euro-area officials familiar with the matter.
The bond-buying options presented to policy makers this week involved combinations of monthly volumes and durations that all stick to existing limits, the people said, asking not to be named as the Governing Council’s deliberations are confidential. The people declined to identify the specifics of the scenarios but said they are within market expectations. An ECB spokesman declined to comment.
U.K: The U.K. economy made a mixed start to the third quarter, output figures published Friday suggest.
Manufacturing rose in July for the first time this year, boosted by a strong rebound in car production, and the trade deficit was little changed from a downwardly revised June. But construction shrank for a fourth consecutive month after a plunge in new orders in the second quarter.
The figures, from the U.K. statistics office, may do little to dispel the picture of an economy stuck in the slow lane as Brexit uncertainty and the squeeze from rising prices take their toll. Growth in the first half was the weakest since 2012 and surveys suggest the dominant services industry is continuing to lose momentum.
Manufacturing rose 0.5% in July, more than the 0.3% economists predicted. Vehicle output, which had fallen sharply in recent months, surged almost 14%, the most since March 2009, helped by new models rolling off production lines. Total industrial production rose 0.2%, held back by a 1.4% drop in oil and gas production.
COMMODITIES: Oil headed for the first weekly gain since July as Gulf Coast refiners ramp up crude processing after disruptions from Hurricane Harvey.
Futures were little changed in New York, up 3.7% for the week. About 8% of U.S. refining capacity remains shut after Harvey first made landfall two weeks ago, according to data compiled by Bloomberg. Almost a quarter of the nation’s capacity was halted following the storm. American crude stock piles rose by 4.58 million barrels last week, the first gain since the end of June.
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 29, 2017, 31.811
Money Market Highlights
30 Day 18.4904
90 Day 20.4382
180 Day 22.0384
USD 1 Month 1.23222
USD 2 Months 1.27500
USD 3 Months 1.31722
USD 6 Months 1.45222
USD 12 Months 1.72400
Tenor Maturity Yield (%)
91d 07-Dec-17 19.07
182d 08-Mar-18 19.10
364d 16-Aug-18 21.03
2y 16-Aug-19 16.86
3y 16-Aug-20 16.73
5y 27-Jan-22 16.47
Indicative Currency Exchange Rates
USDNGN 314.50 315.00
EURUSD 1.1965 1.2167
GBPUSD 1.3084 1.3286
USDJPY 107.44 107.45
GBPEUR 1.0825 1.1029
USDZAR 12.7147 12.9182
EURNGN 424.36 436.69
GBPNGN 474.74 476.13