16 October 2017, Sweetcrude, Houston — the local and international financial market products and services update.
NIGERIA: Despite mounting concerns and the warning by the International Monetary Fund (IMF) of the heightened risks associated with greater reliance on foreign borrowing, the Minister of Finance, Mrs. Kemi Adeosun has said that the federal government would not be reckless with foreign borrowings as it maintains an expansionary fiscal policy.
She also assured Nigerians that it would not bequeath a portfolio of unserviceable debts to future generations of Nigerians.
Adeosun made this known in Washington D.C. at a joint media briefing with the Governor of the Central Bank of Nigeria, Mr. Godwin Emefiele, at the end of the 2017 Annual Meetings of the IMF and the World Bank Group.
FX: We saw NGN range traded in the I&E window last week print at $/N359- 360 as it continues to be supported by decent flows. Turnover last week stood at $1.088bn. we do not foresee any change this week and expect the trend to continue as interest in the mid-end of the bill curve and primary auction by offshore players.
FIXED INCOME: Market ended last week on a strong note though less aggressive. A few profit takers in bonds around midday on Friday but pockets of demand still evident. T-Bill market was skewed to the buyers – FX refunds expected to support money market this week.
E.U: Some European Central Bank policymakers have identified a limit of just over 2.5 trillion euros ($3 trillion) for the region’s quantitative-easing program under the current rules, according to central-bank officials familiar with the matter.
With purchases set to reach 2.28 trillion euros by the end of 2017, discussions are now focused on how to distribute the additional amount over time, said the people, asking not to be named as the matter is private. The Governing Council is deeply divided on whether to name an end date for the program.
Policymakers haven’t officially discussed how to extend the program, and the ECB’s Executive Board has yet to make its proposal to the Governing Council.
U.K: Mark Carney is heading into a crucial week in the countdown to a possible Bank of England rate increase in early November.
After the International Monetary Fund meetings where most central bankers fretted about weak inflation even amid robust global growth, the governor returns to an economy that’s almost the mirror opposite. While Brexit is weighing on U.K. businesses, price growth is above target — something for lawmakers to press him on at a hearing on Tuesday.
In Washington last week, Carney stuck to the Monetary Policy Committee’s line that a rate increase would be appropriate in the “coming months,” echoing the message the BOE has been sending since September but declining to be any more specific. This week’s release of inflation, wage, and retail figures could help him determine the exact timing.
COMMODITIES: Crude extended gains from the highest close in two weeks as speculation mounted over potential output disruptions in a region that’s home to Iraq’s oldest producing oil fields.
Futures in London rose as much as 1.3% after gaining 2.8% last week. Iraqi soldiers moved late Sunday to take over fields in the northern city of Kirkuk from Kurdish forces. That’s amid an intensifying conflict after the semi-autonomous Kurdistan Regional Government, or KRG held a referendum on independence from Iraq on Sept. 25. OPEC sees crude demand growing at a “healthy pace” over the next five years.
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 12, 2017, 33.112
Money Market Highlights
30 Day 21.2407
90 Day 21.6013
180 Day 23.0186
USD 1 Month 1.23667
USD 2 Months 1.27744
USD 3 Months 1.35333
USD 6 Months 1.53433
USD 12 Months 1.72400
Tenor Maturity Yield (%)
91d 11-Jan-18 17.80
182d 19-Apr-18 18.91
364d 04-Oct-18 17.82
2y 23-Oct-19 14.60
3y 20-Sep-20 14.60
5y 27-Jan-22 14.76
Indicative Currency Exchange Rates
USDNGN ( I & I ) 355.00 356.00
EURUSD 1.1684 1.1886
GBPUSD 1.3185 1.3387
USDJPY 111.78 111.81
GBPEUR 1.1170 1.1375
USDZAR 13.2098 13.4132
EURNGN 424.18 425.54
GBPNGN 478.29 479.68