23 October 2017, Sweetcrude, Houston — The Local and international financial market products and services update.
NIGERIA: Members of the House of Representatives are unimpressed with what they term “poor capital releases” for the 2017 budget just as President Muhammadu Buhari is set to lay the 2018 estimates before the National Assembly.
The 2017 budget of N7.441tn has a capital component of N2.2tn. But findings indicated that as of the last releases by the Ministry of Finance, capital funding of projects totaled only N336bn out of the N2.2tn, representing 15.22%. And there are only 67 days left for 2017 to come to a close.
Lawmakers, who had become impatient with the development, on Sunday described the release of N336bn out of N2.2tn as “no budget at all.”
FX: Liquidity remains decent in the I&E window with an average daily turnover of $271m recorded last week. Week-on-week turnover in the I&E is up by 24% and flows were mainly driven by interest in the bill auction held on Wednesday. We expect the market to remain offered this week between $/N 359 – 360 as there will be a bond auction.
FIXED INCOME: Quiet end to close last week. There were sellers of bonds but ultimately, the direction will be dictated by Wednesday’s bond auction.
In T-Bills, there was another round of weakness as expected because of funding for the FX retail auction. The average yield on bills now 19.48% and bonds 14.80%.
CHINA: China’s deleveraging campaign has yet to satisfy the country’s central bank chief, but evidence shows that there are significant areas of progress.
In the wake of People’s Bank of China Governor Zhou Xiaochuan’s call last week for “further efforts” to reduce financial risks, and with President Xi Jinping tightening his grip on China’s power structure, the campaign is tipped to broaden in the coming year.
It has managed to take out a lot of leverage out of the system and make the system safer by keeping overnight rates up and policy rates flat, Financial market deleveraging “will be a real focus next year” after Xi consolidates his position.
E.U: Catalan separatists meet Monday to craft their reply to Prime Minister Mariano Rajoy after the Spanish leader announced an unprecedented barrage of measures to stamp his authority on the rebel region.
Party leaders in the Catalan Parliament are scheduled to meet at 10:30 a.m. to discuss the timing and agenda for the chamber’s next plenary. Regional President Carles Puigdemont, set to be ousted by the Spanish government within days, wants the separatist groups who control the legislature to hold the session this week, a press officer for the regional executive said. Puigdemont has vowed to fight on, and his allies are signaling he could declare independence as soon as this week.
COMMODITIES: Oil extended gains as OPEC and its allies reiterated that all options are open to re-balance the market.
December futures increased as much as 0.8 percent in New York. OPEC and its partners including Russia achieved a record-high level of compliance to output cuts during September, according to a statement Saturday from the committee responsible for monitoring the agreement. In the U.S., drillers reduced the rig count the third week to the lowest since June, according to Baker Hughes.
Oil is holding gains near $52 a barrel on speculation the Organization of Petroleum Exporting Countries will decide to extend supply curbs past the end of March when it meets in Vienna on Nov. 30.
Macro Economic Indicators
Inflation rate (Y-o-Y) for September 2017 16.00%
Monetary Policy Rate current 14.00%
FX Reserves (Bn $) as at October 19, 2017, 33.357
Money Market Highlights
30 Day 20.9783
90 Day 22.1232
180 Day 23.2936
USD 1 Month 1.23788
USD 2 Months 1.29504
USD 3 Months 1.36476
USD 6 Months 1.55489
USD 12 Months 1.72400
Tenor Maturity Yield (%)
91d 25-Jan-18 19.29
182d 19-Apr-18 18.75
364d 04-Oct-18 18.65
2y 23-Oct-19 14.71
3y 20-Sep-20 14.76
5y 27-Jan-22 14.77
Indicative Currency Exchange Rates
USDNGN ( I & I ) 356.00 357.00
EURUSD 1.1642 1.1844
GBPUSD 1.3067 1.3269
USDJPY 113.82 113.84
GBPEUR 1.1112 1.1316
USDZAR 13.6578 13.8622
EURNGN 42142 422.82
GBPNGN 472.67 474.07