11 July 2017, Sweetcrude, Lagos — The local and international financial market products and services update.
NIGERIA: Nigeria’s currency window for investors and exporters has traded around $3.83 billion since it was established on April 24, with the naira trading more strongly than on the black market. The window, where buyers and sellers are free to agree to an exchange rate, was introduced in April to try to attract foreign investors into the country and boost the supply of dollars. Reports have it that $407 million were traded last week compared with $354.8 million in the previous week, indicating a gradual return in investors’ confidence to the West African nation’s foreign exchange market. “We have seen continuous improvement in dollar inflow into the market in recent time from offshore investors and this has also reflected in the volume of transactions at the Equity and Fixed Income Market
FX: CBN held a wholesale auction today with $100m on offer (tenor not exceeding 60 days). Results of last week’s retail auction were released yesterday evening.
FIXED INCOME: Demand for bonds in the secondary market was waned significantly in recent times. The quiet bond market sold off yesterday as Wednesday’s auction expectations were priced in. Bill market also followed a similar tone reacting to money market’s N75bn short position. FX refunds coming in today should boost liquidity in the system.
U.S.: Donald Trump’s nominee to lead the FBI will hear two questions repeatedly from senators at his confirmation hearing Wednesday: did the president demand loyalty in exchange for his nomination, and can he stand up to the White House when the job requires it.
Trump’s pick, Christopher Wray, will step into a precarious job if confirmed to succeed James Comey, who was fired by the president in May after increasing frustration over a federal probe into Russia’s election-meddling and possible links to Trump associates. Comey said the president sought assurances of his loyalty at a private dinner meeting and later encouraged him to drop an investigation into fired National Security Adviser Michael Flynn.
CHINA: China hit back on Tuesday in unusually strong terms at repeated calls from the United States to put more pressure on North Korea, urging a halt to what it called the “China responsibility theory”, and saying all parties needed to pull their weight.
U.S President Trump took a more conciliatory tone at a meeting with Chinese President Xi Jinping on Saturday, but he has expressed some impatience that China, with its close economic and diplomatic ties to Pyongyang, is not doing enough to rein in North Korea.
That feeling has become particularly acute since Pyongyang launched an intercontinental ballistic missile that some experts believe could have the range to reach Alaska, and parts of the U.S. West Coast.
COMMODITIES: OPEC needs to “shock and awe” the oil market for prices to gain, according to Goldman Sachs Group Inc.
The Organization of Petroleum Exporting Countries must increase output cuts aimed at shrinking a global glut with a little public announcement in order to jolt investors, the bank said in a July 10 report. Without such action and no evidence of sustained declines in inventories as well as U.S. drilling activity, prices could slump below $40 a barrel, analysts including Damien Courvalin and Jeffrey Currie wrote in the note.
Macro Economic Indicators
Inflation rate (Y-o-Y) for May 2017 16.25%
Monetary Policy Rate current 14.00%
FX Reserves (Bn $) as at July 06, 2017 30.333
Money Market Highlights
30 Day 20.2332
90 Day 21.9052
180 Day 23.7215
USD 1 Month 1.22633
USD 2 Months 1.25500
USD 3 Months 1.30522
USD 6 Months 1.46544
USD 12 Months 1.72400
Tenor Maturity Yield (%)
91d 12-Oct-17 19.31
182d 11-Jan-18 20.77
364d 21-Jun-18 22.40
2y 29-Jun-19 16.50
3y 14-Jun-20 16.35
5y 27-Jan-22 16.10
Indicative Currency Exchange Rates
USDNGN 314.50 315.00
EURUSD 1.1293 1.1495
GBPUSD 1.2807 1.3009
USDJPY 114.32 114.35
GBPEUR 1.1225 1.1429
USDZAR 13.4614 13.6636
EURNGN 358.27 359.63
GBPNGN 405.87 407.27