05 December 2017, Sweetcrude, Houston, Texas — The local and international financial market products and services update.
NIGERIA: Moody’s Investors’ Services, a global credit rating agency, has said that Nigeria’s credit profile at B2 Stable is constrained by the country’s continued exposure to shocks, weak institutions and elevated deficits.
The rating agency said in its annual report titled, “Government of Nigeria – B2 stable, Annual credit analysis”, that the country’s credit strengths include the large size of the economy and robust medium-term growth prospects supported by the domestic demand. According to the report, the continuing recovery in oil production underpins the country’s more robust medium-term prospects.
It stated that with a rebalanced economy, a further consolidation of the economic fundamentals will strengthen the recovery, with real growth of 3.3% in 2018 and 4.5% in 2019. The federal government is projecting real GDP growth of 3.5% year-on-year in the 2018 budget.
FX: Quiet yesterday in the I&E, activity between banks was light. The daily average last week was $188m, up 5% from the previous week, with most of the trades recorded between the range of $/N 360 – 362. As it’s the norm now, CBN kicked off the week offering $100m to the market via a wholesale auction.
FIXED INCOME: Expectation of a repeat OMO auction was dashed Yesterday. Both markets were quiet till about midday yesterday when harsh reality begun to hit. May and June bills compressed 20bps on average with street showing some reluctance to offer the bills.
In the absence of any OMO announcement, we expect further compression as supply dries up.
U.K: U.K. retail sales rebounded last month, fueled by higher food spending as Black Friday sales failed to tempt enough British shoppers to open their wallets for other things.
The British Retail Consortium said sales rose 0.6% on a like-for-like basis after slumping the most in seven months in October. They climbed 1.5% in total terms.
Yet the numbers suggest households are still reluctant to spend on non-essentials given the squeeze on budgets. Wages are lagging behind inflation and Brexit is creating uncertainty for the economy. The BRC said that in the three months through November, nominal food sales increased 2.8% on a like-for-like basis, buoyed by inflation, while non-food sales fell 1.2%
U.S: A divided U.S. Supreme Court let President Donald Trump’s travel ban take full effect while legal challenges go forward, handing him a major victory and suggesting the court ultimately will uphold the restrictions.
Trump will now be able to bar or restrict entry by people from six mostly Muslim countries, even if they have a relationship with a U.S.-based person or institution. It marks the first time the Supreme Court has let his entry restrictions take full effect.
COMMODITIES: Oil held losses below $58 a barrel before U.S. government data forecast to show crude stockpiles decreased for a third week.
Futures were little changed in New York after dropping 1.5% Monday, the most in three weeks. Inventories probably fell by 2.5 million barrels last week, a Bloomberg survey shows before an Energy Information Administration report Wednesday. OPEC’s November output slid to the lowest in six months, led by declines from Angola and Kuwait, according to a separate Bloomberg survey.
Macro Economic Indicators
Inflation rate (Y-o-Y) for October 2017 15.91%
Monetary Policy Rate current 14.00%
FX Reserves (Bn $) as at November 29, 2017, 34.816
Money Market Highlights
30 Day 18.2130
90 Day 19.8121
180 Day 22.1545
USD 1 Month 1.37938
USD 2 Months 1.44150
USD 3 Months 1.49463
USD 6 Months 1.67425
USD 12 Months 1.72400
Tenor Maturity Yield (%)
91d 08-Mar-18 17.30
182d 07-Jun-18 19.22
364d 01-Nov-18 18.30
2y 15-Nov-19 14.99
3y 15-Nov-20 14.78
5y 27-Jan-22 14.52
Indicative Currency Exchange Rates
USDNGN (I&E) 358.00 359.00
EURUSD 1.1753 1.1955
GBPUSD 1.3284 1.3486
USDJPY 112.59 112.62
GBPEUR 1.1190 1.1394
USDZAR 13.4239 13.6283
EURNGN 425.72 427.07
GBPNGN 480.79 482.18