25 September 2017, Sweetcrude, Lagos — The local and international financial market products and services update.
NIGERIA: Total trade value for the week was a marked improvement $1.323 billion, compared to the $803.1 million recorded in the preceding week.
The surge in activities at the window was attributed to offshore investor interest in treasury bills and the primary market auction (PMA) held last week by the Central Bank of Nigeria (CBN), with the rate on the NAFEX.
Last April, the CBN introduced the I&E window including a raft of other measures to improve dollar liquidity in the forex market. The central bank has since intervened actively to support the local currency while keeping domestic liquidity conditions tight. Most activities now occur on the I&E window, with Fitch Ratings recently acknowledging that the rate on the I&E “should now be considered the relevant exchange rate”.
FX: Friday, the I&E window saw a record turnover in a single session at $545m, this was almost twice the previous week Thursday’s turnover. The total turnover for last week is circa $1.3bn. The pair may appreciate further is this pattern persist.
FIXED INCOME: Bond was the more active market on Friday as the curve surprisingly compressed further on client demand/short covering.
Initial profit taking did not last long and offers on all maturities closed sub 16%.
Curve now looks a bit expensive considering upcoming supply on Wednesday Bond Auction. The tone in bonds on today will be dependent on how much demand there still is out there.
U.S: Senators sponsoring a last-ditch Obamacare repeal bill scrambled to save it from near-certain death Sunday, circulating a new version aimed at winning over several GOP holdouts, according to two people familiar with the discussions.
Some of the changes, which come as Republicans face a Sept. 30 deadline to pass the measure, were designed to appeal to moderate holdouts like Lisa Murkowski of Alaska, while others appeared tailored to lure conservative sceptics like Rand Paul of Kentucky.
U.K: British lenders need to hold around an extra 10 billion pounds ($13.5 billion) in capital to guard against increased risks from rapidly rising unsecured consumer lending, the Bank of England said on Monday.
British consumer borrowing is growing at nearly 10% a year, far faster than incomes, and the BoE’s Financial Policy Committee said it would tell banks by the end of the year how much extra capital to hold, based on the riskiness of their lending.
British consumer borrowing is growing at nearly 10% a year, far faster than incomes, and the BoE’s Financial Policy Committee said it would tell banks by the end of the year how much extra capital to hold, based on the riskiness of their lending. Policymakers also warned that Britain’s upcoming departure from the European Union in March 2019 posed big legal problems for about a quarter of derivative contracts, which businesses use to hedge against interest rate and currency risks.
COMMODITIES: Oil held gains above $50 a barrel as OPEC and Russia said they were about halfway toward clearing a global glut and urged fellow producers to stay focused and finish the job.
Futures were little changed in New York after advancing 1.5% last week. The OPEC-led group implemented more than 100% of its agreed cuts last month and bloated fuel stockpiles have been “massively drained,” OPEC Secretary-General Mohammad Barkindo said Friday in Vienna. Russia signalled it would be willing to extend supply curbs past the end of March if needed.
Macro Economic Indicators
Inflation rate (Y-o-Y) for June 2017 16.10%
Monetary Policy Rate current 14.00%
FX Reserves (Bn $) as at September 14, 2017, 31.883
Money Market Highlight
30 Day 18.5279
90 Day 21.5394
180 Day 22.6072
USD 1 Month 1.22833
USD 2 Months 1.27222
USD 3 Months 1.32944
USD 6 Months 1.49683
Tenor Maturity Yield (%)
91d 28-Dec-17 17.40
182d 29-Mar-18 18.46
364d 16-Aug-18 19.77
2y 23-Oct-19 15.94
3y 16-Aug-20 15.93
5y 27-Jan-22 15.98
Indicative Currency Exchange Rates
USDNGN 355.00 356.00
EURUSD 1.1783 1.1986
GBPUSD 1.3400 1.3602
USDJPY 112.03 112.06
GBPEUR 1.1253 1.1457
USDZAR 13.1674 13.3708
EURNGN 426.68 428.05
GBPNGN 484.66 486.06