Treasury Market Update.........

19th October 2016.........

FOREIGN EXCHANGE MARKET

News
> The US dollar traded mixed, briefly weakening before picking up after US
consumer prices recorded their biggest gain in five months in September as the
gasoline and rent prices soared, prompting bets a December Federal Reserve
rate hike is still on track.

> The Great Britain pound rebounded to 1.2324 against the US dollar after a UK
government lawyer stated that the parliament would "very likely" have to ratify
any deal to take Britain out of the European Union while the core inflation for
the UK came in above expectations.

> The euro fell to USD 1.0970, just above the 2 1/2-month low of USD 1.0964 hit
on Monday, weighed down in cautious trade ahead of the ECB policy meeting on
tomorrow. Market players are nervous, as they expect the ECB chief Mario
Draghi to take a dovish stance to counter recent talk on the tapering of its asset
purchases.

> The CAD firmed to 1.3060 against the greenback yesterday on better-thanexpected results from Canadian Manufacturing Shipments during the month of
August.
> The Rand rallied to USD 13.88 its firmest in one week as fear over the recent
issue of the arrestation of the Finance Minister subsided.

> The Aussie weakened to USD 0.7662 this morning despite China reported that
GDP growth in the third quarter matched expectation along with solid figures
for retail sales, industrial output and fixed asset investment.

> The US dollar is trading stable on the local market while the euro and australian
dollar give up previous gains and the pound sterling rises for the second
consecutive day.

Daily Technical View

The dollar stood strong against the Euro ahead of tomorrows ECB meeting. EURUSD rallied in yesterdays Asian session but found renewed selling pressure at 1.1025
and slid lower to 1.0967. The pair is hovering around 1.0980 this morning and intraday resistance sits at 1.1000. Any further gains should be capped at 1.1040/50. On the
downside, yesterdays low acts as first line of support and a clear break below would expose the 1.0900/10 level.

Market Highlights
Indicative Spot Rates

Indicative Forward Rates

Bid
AUDMUR

Bid

Change (Rs.)

Today

Change (Rs.)

26.90

(0.02)

28.17

(0.02)

Offer

1m

3m

6m

1m

3m

6m

AUDMUR

26.87

26.87

26.84

28.19

28.25

28.34
40.89

CNYMUR

5.18

5.45

EURMUR

38.76

38.92

39.14

40.34

40.55

EURMUR

38.72

(0.14)

40.25

(0.14)

ZARMUR

2.53

2.50

2.46

2.65

2.63

2.60

JPYMUR

33.88

0.01

35.38

0.01

USDMUR

35.27

35.34

35.38

36.71

36.82

36.97

GBPMUR

43.33

43.45

43.61

45.09

45.27

45.56

ZARMUR

2.54

0.04

2.66

0.04

USDMUR

35.26

36.65

GBPMUR

43.30

0.20

45.01

0.21

EURMUR

EURUSD

GBPMUR

USDMUR

GBPUSD

USD INDEX

1.3400

36.80

98.40

41.00

1.1220

48.00

1.3100

36.70

97.70

40.80

1.1150

47.00

1.2800

36.60

97.00

40.60

1.1080

46.00

1.2500

36.50

96.30

40.40

1.1010

45.00

1.2200

36.40

95.60

1.0940

44.00

1.1900

36.30

24-Sep

29-Sep

4-Oct

9-Oct

14-Oct

19-Oct

24-Sep

Previous Day Trading Levels

29-Sep

4-Oct

9-Oct

14-Oct

GBPUSD

40.20

USDMUR

49.00

GBPMUR

1.1290

19-Oct

USD INDEX

41.20

EURUSD

EURMUR

Offer

Today

94.90
24-Sep

29-Sep

4-Oct

9-Oct

14-Oct

19-Oct

Today

Major Indices

Value at Close

Day Change %

Opening

High

Low

Latest

DOW JONES

18,086.40

0.42

AUDUSD

0.7666

0.7690

0.7662

0.7674

S&P 500

2,139.60

0.62

EURUSD

1.0979

1.0999

1.0971

1.0983

FTSE 100

7,000.06

0.76

GBPUSD

1.2292

1.2314

1.2272

1.2279

DAX

10,631.55

1.22

USDJPY

103.84

103.94

103.66

103.78

NIKKEI 225*

16,995.81

0.19

USDCHF

0.9896

0.9909

0.9875

0.9900

HANGSENG*

23,341.30

(0.23)

USDCNH

6.74

6.75

6.74

6.75

Major Economic Releases (at GMT)

Date

Time

Country

Event

Period

Actual

Expected

Prior

19-Oct

12 30

US

Housing Starts (MoM)

Sep

1.170M

1.142M

19-Oct

14 00

CA

BoC Interest Rate decision

0.5%

0.5%

20-Oct

00 30

AU

Unemployment Rate

Sep

5.7%

5.6%

20-Oct

08 30

UK

Retail Sales (MoM)

Sep

0.3%

-0.2%

This commentary is for information only, and the comments and forecasts are intended to be of a general nature, and are current at the date of issue. This document is not intended as an offer, solicitation, or recommendation to buy or
sell financial instruments or for any individual investment.
Source: MCB Treasury, Reuters, Bloomberg, Bank of Mauritius

Treasury Market Update.........

19th October 2016.........

FIXED INCOME
News
> Treasury prices headed north yesterday, driving yields lower, after US inflation
data showed that the pace of price appreciation for core goods slowed in
September.
> The yield on the benchmark 10-year treasury note settled at 1.748 percent,
compared with 1.766 percent on Monday and a four-month close high of 1.792
percent on Friday.
> In the UK, the yield on the 10 year gilt rose to 1.22 percent yesterday, its highest
level since the country voted to leave the EU after data showed that annual
consumer price inflation last month jumped to a two-year high of 1 per cent.

> Concerns over the inflation outlook had been a big factor causing bond yields in
the developed world to rise this month.
> Meanwhile, Saudi Arabia has started the process of selling its first international
bonds. Market participants believe that the size of the offerings, spreading in
five-year, 10-year and 30-year maturities, should exceed USD10 billion.
> Today, the Bank of Mauritius will auction Five-Year Government of Mauritius
Bonds for nominal value of MUR 1,600.0 Mio.

Market Highlights
Local Secondary Market

Government Benchmark Bond Yields (%)

Bid (%)

Offer (%)

91 to 135

2.45

2.25

US Bonds

Key Central Bank Rates

2 Year

5 Year

10 Year

0.803

1.236

1.747

Current
Level (%)

Previous (%)

BOM Repo Rate

4.00

4.40

136 to 180

2.55

2.35

UK Bonds

0.206

0.454

1.078

Feds Fund Rate

0.25 - 0.50

0 - 0.50

181 to 240

2.60

2.40

German Bonds

-0.670

-0.496

0.035

BoE Bank Rate

0.25

0.50

241 to 300

2.70

2.50

ECB Ref. Rate

0.0

0.0

301 to 364

2.80

2.60

RBA Cash Rate

1.50

1.75

Local Treasury bills Market

Money Market Rates

4.00

Weighted Average Yield

3.50
364

3.00
2.50

182

LIBOR (%)

1 Week

1 Month

3 Months

6 Months

EUR

-0.389

-0.379

-0.324

-0.215

USD

0.458

0.526

0.881

1.261

GBP

0.251

0.265

0.402

0.566

EURIBOR

-0.380

-0.371

-0.311

-0.204

JIBAR

n/a

7.117

7.358

7.975

2.00
91

Indicative Generic Swap Rates* (%)

1.50

2yr

5yr

7yr

10yr

EURIBOR - 3m

-0.296

-0.205

-0.031

0.282

USD LIBOR - 3m

1.035

1.257

1.400

1.581

Tenor
1.00
Mar-16

Apr-16

May-16

Jun-16

Jul-16

Aug-16

Sep-16

*Pay fixed and receive floating swap

COMMODITIES
Rolling Gold & Oil Prices

News
> Gold, which is sensitive to moves in interest rates and the dollar, gained as
the greenback traded mixed.

Oil Price

1345

54.00

1330

52.50

1315

51.00

1300

49.50

1285

48.00

1270

46.50

1255

45.00

1240

43.50
24-Sep

29-Sep

4-Oct

9-Oct

14-Oct

19-Oct

> Oil prices extended gains, bolstered by falling crude inventories, the
weaker US dollar and OPEC statement indicating the planned output cut
was achievable.

Oil Price (USD)

Gold Price (USD)

Gold Price

> The American Petroleum Institute data showed an unexpected draw of 3.8
million barrels in US crude stocks in the week to October 14. The US Energy
Information Administration (EIA) is due to release official fuel storage data
later today.

Spot Market

Futures Market

Today

Change ($)

Today

Change ($)

Brent Crude Oil ($)

49.59

0.42

52.12

0.35

WTI Crude Oil ($)

50.75

0.57

50.75

0.57

Gold ($)

1,262.20

3.66

1,262.90

8.50

Silver ($)

17.65

0.02

17.60

0.17

This commentary is for information only, and the comments and forecasts are intended to be of a general nature, and are current at the date of issue. This document is not intended as an offer, solicitation, or recommendation to buy or
sell financial instruments or for any individual investment.
Source: MCB Treasury, Reuters, Bloomberg, Bank of Mauritius