06 November 2012, Sweetcrude, Lagos – Local and international financial market update.
Nigeria – Barclays will add Nigeria to its emerging market locally currency government index from March 2013. Decision comes after reviewing changes in market place and polling investors on governance market and accessibility. Eligibility criteria include minimum market size equivalent of $5bn; each bond must have at least $300m outstanding and 12 months to maturity. About $6.5 trillion of funds track Barclays indexes it is estimated.
USA – The JPY strengthened against the USD before US presidential elections and the AUD rallied the most in two weeks after the nation’s central bank surprised economist by leaving interest rates unchanged.
US Treasuries snapped a gain before the US auctions $72 bn of coupon bearding debt this week and a$32 bn three year bond sale today. Government securities rose yesterday as investors sought the relative safety of US debt while Americans head to the poll today. Who ever wins will face the ob of avoiding the so called “fiscal cliff” of $607 bn in federal spending cuts and tax increases schedule to take effect in January unless the US congress acts.
EUROPE – The EUs top economic commissioner said euro leaders need to lock down an agreement on tackling Greece’s debt by next week as regional finance chiefs demanded their response to the sovereign debt crisis. A European G 20 official speaking before Commissioner Olli Rhen, on condition of anonymity cast doubt on the prospects of the Nov 12 deadline being met.
WDAS – NGN: CBN offered $50mio and sold $29.88mio, the marginal rate was maintained at 157.2974 [inc. the 1% commission] NGN: 7 banks bid at the auction today.
Bonds – Yields trended down across the curve on Monday, volumes were low though but the general sentiment leaned towards lower yields. Some caution though as yields get knocked down over 40bps from last auctions levels.
Bills – Most of the activity continues to be concentrated on the short end with any excess liquidity being deployed there, auctions come up on Wednesday and we can expect most of the longer dated demand to feed into there.
Indicative Currency Exchange Rates
EURUSD 1.2792 1.2802
GBPUSD 1.5992 1.6002
USDJPY 8.03 8.43
USDCHF 0.9435 0.9455
GBPEUR 1.2500 1.2510
USDZAR 8.7227 8.8227
USDNGN 157.08 157.58
JPYNGN 19.5616 19.6116
CHFNGN 166.49 170.49
EURNGN 200.94 204.94
GBPNGN 251.20 255.20
ZARNGN 18.01 20.01
Hedge-fund managers and other large speculators reduced their net-long positions in crude to the lowest level in almost five months in the week ended Oct 30. Managed-money bets that prices will increase outnumbered so-called short positions by 122,863 futures and options combined; net long positions fell by 15,477 contracts or 11% w/w
NIBOR (%) LIBOR (%)
O/N 12.0833 USD 1 month 0.2080
7 Day 12.9583 USD 2 month 0.2595
30 Day 14.2500 USD 3 month 0.3118
60 Day 15.3333 USD 6 month 0.5358
90 Day 15.7083 USD 12 month 0.8738
Y/Y Consumer Inflation September 2012 : 11.3%
FX Reserves: 31( October 2012 (USD bn) 42.67
Source: Reuters Guardian, Bloomberg, Central Bank of Nigeria,
Financial Market Dealers Association Standard Chartered Bank Nigeria
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USD/NGN 157.30/40 156.50/60 157.30/40 156.98/08