18 September 2017, Sweetcrude, Lagos — The international financial market products and services update.
NIGERIA: Annual inflation in Nigeria slowed for a seventh month in August, easing to 16.01%, the National Bureau of Statistics (NBS) said on Friday. The rate of annual inflation was 0.04% lower than in July. “The highest increases were recorded in clothing materials and articles of clothing, garments, passenger transport by air, motorcycles, shoes and other footwear,” said the statistics office in its report. A separate food price index showed inflation at 20.25% in August, compared with 20.28% in July.
FX: Last week, naira in the I&E window market traded a range of $/N 335.00 – 363.00. The pair was well supported by inflows for the bill auction on Wednesday. Turnover stood at $671.26m except for Friday.
FIXED INCOME: Despite the new 1yr bill (13/09/18) not trading 2-way yet, we saw some bids at low 17% with some trades going through at lower. Aug bills now offered at sub 17% discount, overall indicating that demand for bills remains strong. Bonds saw a some profit taking to close on Friday after the initial rally – we expect a soft tone to start this week. Another bill auction this week – on offer is N28.12, N23.68 and N89.08bn on the 91, 182 and 364day bill respectively.
U.S: The Federal Reserve will leave interest rates unchanged at its meeting this week while staying on track to lift its benchmark lending rate by a quarter percentage point in December, according to a Bloomberg survey of 42 economists.
Results of the survey, conducted September 12-14, showed economists also widely expect Fed officials to begin winding down their $4.5 trillion balance sheet in October, and will announce that timing at 2 p.m. Wednesday after their two-day meeting in Washington.
“While transitory factors may stay the Fed’s hand in the short-term, the path to normalization of the fed funds target range should continue in December,” said Scott Anderson, chief economist at Bank of the West, in San Francisco.
CHINA: China’s central bank is drafting a package of reforms which would give foreign investors greater access to the nation’s financial services industry, according to people familiar with the matter.
The People’s Bank of China will convene an internal meeting on Tuesday to discuss its proposals and get feedback from Chinese institutions, said the people, who asked not to be identified as the matter is private. The meeting will also discuss the timetable for opening up the financial sector and the lessons learned from previous cooperation with foreign firms, the people added.
While the details of the plan have yet to be finalized, it may include permission for foreign institutions to control their local finance-sector joint ventures, as well as raising the current 25% ceiling on foreign ownership in Chinese banks, the people said.
COMMODITIES: Oil held gains near $50 a barrel as the U.S. rig count dropped the most since January after a record expansion earlier this year.
Futures were little changed in New York after advancing 5.1% last week. Rigs targeting crude fell by seven to 749, according to data Friday from Baker Hughes. Drillers haven’t added any new machines during the past five weeks, capping in August the first monthly drop since May 2016. The third hurricane this month is tracking toward the Caribbean and strengthening along the way.
Macro Economic Indicators
Inflation rate (Y-o-Y) for June 2017 16.10%
Monetary Policy Rate current 14.00%
FX Reserves (Bn $) as at August 29, 2017, 31.811
Money Market Highlights
30 Day 17.4441
90 Day 20.4779
180 Day 22.9299
USD 1 Month 1.23722
USD 2 Months 1.27278
USD 3 Months 1.32389
USD 6 Months 1.47111
USD 12 Months 1.72400
Tenor Maturity Yield (%)
91d 14-Dec-17 19.36
182d 15-Mar-18 19.49
364d 16-Aug-18 20.05
2y 16-Aug-19 16.38
3y 16-Aug-20 16.23
5y 27-Jan-22 16.26
Indicative Currency Exchange Rates
USDNGN ( I & I) 350.00 351.00
EURUSD 1.1839 1.2042
GBPUSD 1.3461 1.3663
USDJPY 111.38 111.41
GBPEUR 1.1258 1.1462
USDZAR 13.1280 13.3299
EURNGN 428.61 429.94
GBPNGN 486.95 488.35