13 April 2018, Sweetcrude, Lagos — The local and international financial market products and services update.
NIGERIA: Nigeria’s President Muhammadu Buhari announced on Monday he wants to seek another term in office in February 2019 elections. With that declaration, the race to lead Africa’s largest democracy is underway. The path ahead could be tough for his All Progressives Congress (APC), the People’s Democratic Party (PDP) opposition and any other party that may contest the vote. Buhari’s 2015 victory was built on three promises: to rid Nigeria of its endemic corruption, to fix the economy and to defeat threats to security. The results have been mixed. He has not brought an end to the war with the Boko Haram Islamist insurgency, now in its tenth year.
FX: Activities in the I&E window remains the same where not much trading in the interbank space but Banks meeting up demands for its customers. Turnover print for yesterday is at $295.68m a 52.74m rise from previous day’ figures. The traded range comes in tighter at 357.00-361. The market also expects a retail auction announced today.
FIXED INCOME: The much-awaited OMO was announced yesterday, continuing a trend of the auction holding only when there’s a maturity (Thursdays). Less attention was given to Mar inflation print released yesterday morning (13.34% vs 14.33% in Feb).
At the OMO, CBN stuck to the N500bn offered, deviating from last week where all bids submitted were accommodated. Prints were also down 31bps on average to 13.99% discount (15.44% yield) for the 245day bill.
With a chunky amount of unsuccessful bids yesterday (Bid/cover at 1.93), we expect the overhang to increase demand for bills today.
Bond market to also close the week skewed to the buyers while O/N rate to remain in low single digits with over N500bn left in the system after the OMO.
E.U.: The European Central Bank is finding out just how tricky its policy path could be in a year when political spats are overshadowing the economy. The account of the March 7-8 Governing Council meeting listed concerns including that U.S. import tariffs — announced just before the gathering — would hurt “all countries involved.” It also pointed to potentially unforeseen consequences of Britain’s withdrawal from the European Union and economic slack that might be greater than previously thought.
CHINA: China’s overseas shipments posted a decline on seasonal effects around the Chinese New Year holiday.
Exports fell 2.7% in March from a year earlier, after a revised 44.1% gain the previous month, the customs administration said Friday. Imports increased 14.4%, leaving a trade deficit of $4.98 billion, the first since February 2017. Economists in a Bloomberg survey had forecast a surplus of $27.5 billion.
Economists said that the fall in exports was due to seasonal effects because the Lunar New Year holiday fell in mid-February, weighing on March exports, while the year-earlier comparison was elevated because the week-long break began in January the prior year.
COMMODITIES: Oil headed for the biggest weekly advance in more than eight months on speculation tensions in the Middle East may lead to supply disruptions, reinforcing a buy call on commodities by Goldman Sachs Group Inc.
Futures have gained 8% this week in New York. President Donald Trump met with his national security team on Thursday to discuss a U.S. response to an apparent chemical weapons attack in Syria as U.K. Prime Minister Theresa May’s cabinet said it’s “vital” to respond to the incident. Those tensions are aggravating an already-tight market and stirring potential for supply disruption, according to Goldman.
Macro Economic Indicators
Inflation rate (Y-o-Y) for March 2017 13.34%
Monetary Policy Rate current 14.00%
FX Reserves (Moving Avg Bn $) as at April 09, 2018, 46.753
Money Market Highlights
30 Day 14.4265
90 Day 15.2737
180 Day 16.9888
USD 1 Month 1.89713
USD 2 Months 2.02225
USD 3 Months 2.33746
USD 6 Months 2.45380
USD 12 Months 1.72400
Tenor Maturity Yield (%)
91d 12-Jul-18 13.18
182d 11-Oct-18 14.31
364d 04-Apr-19 15.45
2y 13-Feb-20 13.44
3y 15-Jul-21 13.37
5y 14 Mar-24 13.52
Indicative Currency Exchange Rates
USDNGN (I&E) 359.00 360.50
EURUSD 1.2207 1.2405
GBPUSD 1.3908 1.4264
USDJPY 106.99 107.02
GBPEUR 1.1391 1.1595
USDZAR 11.9778 12.2500
EURNGN 440.49 444.86
GBPNGN 504.50 510.90