All eyes were on the United States of America (US) in the outgone week with the US Federal Reserve increasing its benchmark interest rate by 25basis points to 1.50%-1.75% range while the trade conflict intensified between China and the US, the two largest economies in the world, accounting for about 40% of global GDP. These events overshadowed the Bank of England’s decision to maintain its benchmark interest rate at 0.50% while hinting at May 2018 hike.
The Nigerian economy may have seen support in the outgone week following the affirmation of its B/B rating with a stable outlook on her long and short term sovereign credit by S&P, a global rating agency, as well as Senate’s approval of the two nominated Deputy Governors and three out of the four Monetary Policy Committee (MPC) members. Also, President Buhari’s directive to Ministries, Departments & Agencies of government to submit details of their budget to the National Assembly on or before the close of the outgone week, could be supportive of the passing of the administration’s N8.6trillion 2018 budget.
Similar to the previous week, the Nigerian equities market continued its bearish run, shedding 1.11% week-on-week (w/w) in the outgone week, after closing down four out of the five trading sessions of the week.
Despite N205bn worth of bills that matured during the week, the O/N and OBB rates rose by 791bps and 1134bps to close at 20.83% and 23.17% respectively. This may not be unconnected with CBNâs sales of N358.42bn worth of OMO bills during the week as well as banks funding of CBN’s FX auctions, which may have led to a squeeze on system liquidity.
The bond market was bearish in the outgone week as yields increased across most tenors.
Foreign Exchange Market
The NGN closed at N305.75, losing by 0.02% against the USD at the interbank market.
The Week Ahead
The Nigerian Bureau of Statistics will release FAAC for the month of February 2018 on the 25th of March 2018.
United States of America
There will be a 3-month and 6month bill auction on the 26th of March 2018
There will also be a 2-year note auction on the 26th of March 2018
There will be a 4-week and 52-week bill auction on the 27th of March 2018
There will also be a 5-year note auction on the 27th of March 2018
Will release the GDP growth rate for Q4 2017 on the 28th of March 2018
There will be a 7-year note auction on the 28th of March 2018
Japan Statistics Bureau of Japan will release inflation rate for March 2018 on the 29th of March 2018
The Statistics Bureau of Japan will release unemployment rate for February 2018 on the 30th of March 2018 United Kingdom
The Office for National Statistics will release GDP growth rate for Q4 2017 on the 29th of March 2018
The National Bureau of Statistics of China will release manufacturing PMI for the month of march on the 31st of March 2018