02 March 2018, Sweetcrude, Lagos — The local and international financial market products and services update.
NIGERIA: The value of capital imported into Nigeria rose 29.9% in the fourth quarter to $5.32 billion, as economic activity gathered pace after the first recession in a quarter century, the National Bureau of Statistics (NBS) said on Thursday. Capital imports stood at $12.2 billion for 2017, up from $5.38 billion previous years, the NBS said. Nigeria’s economy climbed 1.9% in the fourth quarter to return to growth as oil revenues rose. The central bank has been injecting dollars into the forex market to support the naira and the economy. Capital imports were over $4 billion in the third quarter, the first such quarterly rise since 2015. The rise was driven by portfolio and other investments, the NBS said in a report. Portfolio investment accounted for the largest amount of capital imported in Q4 2017, driven by strong growth in money market instruments, the statistics office said.
FX: Yesterday, $405.07m worth of flows were traded in the I&E window, with the range reported between $/N 357 – 361.00. The turnover was however up by $212.17m compared to the previous day. The pattern observed yesterday was unchanged with most trade going through at $/NGN 360 level.
FIXED INCOME: Yields opened an average of 5bp lower in both bills and bonds, however there were only a few buyers.
Focus was primarily on the OMO announcement as Wednesday ’s overhang from the 1yr went there. Post announcement, there was some correction with both bonds and bills closing roughly flat on the day.
N276bn of the 15th Nov 2018 bill was sold at 14.4% discount (16.04% yield). Money market is still significantly liquid (cN600b) so we expect another OMO today in conjunction with the scheduled FX retail auction.
E.U: Economists no longer predict the European Central Bank will change its guidance on future policy at the Governing Council’s March 8 meeting.
Instead, the analysts surveyed regularly by Bloomberg forecast policy makers to pare back their pledge on asset purchases by June, and to set an end date for the stimulus program by July. Tweaks to the guidance on interest rates, which currently foresees no change until “well past” the end of bond buying, are only expected by September.
U.S: Federal Reserve Chairman Jerome Powell and one of his top lieutenants praised the benefits of a global economy without trade restrictions on a day when President Donald Trump announced plans to slap tariffs on imported steel and aluminium.
Responding to questions Thursday from the Senate Banking Committee, Powell said a system where goods and services flow freely is a net positive for many countries, though the benefits aren’t spread equally. New York Fed President William Dudley was even more explicit in his criticism of trade barriers, saying in a speech in Brazil that “protectionism is not the answer.”
COMMODITIES: Oil is set for the first weekly decline since early February on fears over a shale boom and following a selloff in risk assets on concerns U.S. President Donald Trump’s tariffs will spark a global trade war.
Futures in New York were little changed and on course for a 4.2% drop this week. Asian stocks dropped, with losses spilling over from the U.S. session as Trump said he’ll slap tarialuminumeel and aluminium imports to protect national security. The duties may also lift the cost of new oil pipelines amid swelling oil inventories and accelerating output by drillers in the U.S.
Macro Economic Indicators
Inflation rate (Y-o-Y) for January 2017 15.13%
Monetary Policy Rate current 14.00%
FX Reserves (Moving Avg Bn $) as at February 27, 2018, 42,354
Money Market Highlights
30 Day 15.3017
90 Day 16.0920
180 Day 17.9412
USD 1 Month 1.67007
USD 2 Months 1.81399
USD 3 Months 2.01719
USD 6 Months 2.22375
USD 12 Months 1.72400
Tenor Maturity Yield (%)
91d 31-May-18 14.96
182d 30-Aug-18 15.53
364d 14-Feb-19 15.09
2y 13-Feb-20 13.84
3y 17-Jan-21 13.73
5y 27-Jan-22 13.61
Indicative Currency Exchange Rates
USDNGN (I&E) 359.00 360.00
EURUSD 1.2305 1.2507
GBPUSD 1.3672 1.3874
USDJPY 105.67 105.70
GBPEUR 1.1120 1.1323
USDZAR 11.7410 11.9441
EURNGN 441.40 442.77
GBPNGN 495.46 501.50