09 October 2017, Sweetcrude, Lagos — the local and international financial market products and services update.
NIGERIA: All through last month the Nigerian equities market has been trading on sideways since bargain hunting and profit takings seized investors sentiment after a long period of a bullish run. The feelings in the market is that of speculative positioning to year end.
But the market still has third quarter (Q3’17) results to bet on. The results are expected to begin rolling in by next week. Thus this week may witness an upside of the bargain hunting.
However, most traders are of the view that aside from the Q3’17 expectations, there seem to be no new drivers of positive sentiment in the immediate term. Thus the Q3’17 expectations may be short-lived.
FX: Really quiet session in the I&E window on Friday with offers seen between $/N 359.50 – 360.50. So far this week we see the turnover at $1.006Bn and this has mainly been driven by the bill’s auction held on Wednesday. The CBN also held a retail auction on Friday and sold circa $195m through its wholesale intervention and allocation to banks for invisible and SME transactions.
FIXED INCOME: Market was relatively calmer on Friday compared to previous days, most of the action was on the LHS. There were a couple of demand from PFAs for both bills and bonds, but it couldn’t change the direction of the market. Offshore clients now looking to bid more of the 6m OMOs rather than 12m because of the better yield.
CBN sold another 6bn of the 12apr18 bill on Friday at 19.70% yield. Money Market liquidity ran dry following the announcement of the retail auction, this caused O/N to shoot up from 10% to close at 26%.
U.S: The U.S. and Turkey each suspended visa services for citizens looking to visit the other country, a sharp escalation of a diplomatic spat that sent the lira down more than 6% against the U.S. dollar.
The moves followed the Oct. 4 arrest of a Turkish national who works at the U.S. consulate in Istanbul for alleged involvement in the July 2016 coup attempt against President Recep Tayyip Erdogan. Hours after the Trump administration halted visa services in Turkey on Sunday, Erdogan’s government responded in kind, even repeating verbatim much of the U.S. statement.
E.U.: German Chancellor Angela Merkel reached a compromise with her Bavarian allies on limiting migration, clearing an obstacle to talks on forming her next government and responding to an electoral surge by the nationalist Alternative for Germany party.
Two weeks after an election that sent support for her Christian Democratic Union-led bloc to the lowest level since 1949, setting the political goal of capping migration marks a concession by Merkel, who has resisted pressure by her CSU sister party for a limit. She now should be able to turn to talks with the Free Democratic Party and Greens on building a coalition contract for her fourth term.
COMMODITIES: Oil traded below $50 a barrel as workers started returning to platforms in the Gulf of Mexico after Hurricane Nate crossed the coast.
Futures rose 0.4% in New York after losing 3%Friday. Royal Dutch Shell Plc and Chevron Corp. are among companies working to restore oil and gas operations as Nate weakened on Sunday after it made landfall near Biloxi, Mississippi. The storm follows Hurricanes Harvey and Irma, which rattled energy markets last month after shutting refineries and pipelines. U.S. drillers reduced the rig count by two last week, according to Baker Hughes.
Macro Economic Indicators
Inflation rate (Y-o-Y) for August 2017 16.01%
Monetary Policy Rate current 14.00%
FX Reserves (Bn $) as at October 03, 2017, 32.740
Money Market Highlights
30 Day 19.9857
90 Day 21.4585
180 Day 22.9105
USD 1 Month 1.23500
USD 2 Months 1.27133
USD 3 Months 1.35028
USD 6 Months 1.51878
Tenor Maturity Yield (%)
91d 11-Jan-18 16.38
182d 05-Apr-18 18.27
364d 20-Sep-18 19.62
2y 20-Sep-19 14.94
3y 20-Sep-20 14.94
5y 27-Jan-22 15.83
Indicative Currency Exchange Rates
USDNGN 355.00 356.00
EURUSD 1.1630 1.1831
GBPUSD 1.3007 1.3209
USDJPY 112.61 112.65
GBPEUR 1.1071 1.1277
USDZAR 13.6078 13.8115
EURNGN 420.93 422.47
GBPNGN 470.49 471.89