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

6th October 2016.........

FOREIGN EXCHANGE MARKET

News
> EURUSD traded in a narrow range, with the US dollar supported by encouraging
US services sector despite the weaker-than-expected private-sector job growth
report. US services industries grew at their fastest pace in 11 months in
September; reinforcing expectation the Federal Reserve would raise interest
rates later this year.
> Boosted by rising euro zone government bond yields, the Euro rallied to a fiveyear high against the struggling sterling and three-week peak versus the yen.
> The British pound dipped below USD 1.27 on Wednesday for the first time
since June 1985 and hit 1.2680 on going Brexit uncertainty. However, the pound
managed to recover some ground, bolstered by better than expected UK
services PMI for September while the market now awaits for UK Manufacturing
Production data due this evening.

> The Aussie held weaker in Asia this morning after a narrower than expected
trade deficit for the month of August.
> The USD/JPY pair rallied to 103.65 after the release of strong US ISM Nonmanufacturing PMI which boosted the case for a December Fed rate hike,
although the main risk event for the major, US payroll data, is due on Friday.
> The Canadian dollar strengthened slightly against its US counterpart on
Wednesday as a rise in the country exports reduced the risk of a Bank of
Canada rate cut and oil climbed to a three-month high.
> On the local market, the pound sterling drops for the fifth consecutive day and
hits another record low level with Brexit fears still pressuring the market while
the euro surrendered previous gains versus the rupee and the US dollar still
trading flat.

Daily Technical View

The Greenback strengthened against its counterparts yesterday following upbeat US economic data. EURUSD retreated from its high of 1.1234 and found support at
1.1187. The pair is currently steady at 1.1200 and dollar strength across the board this morning could drive EURUSD lower towards 1.1175/85. Strong support lies at
1.1140/60. Intraday rally should be capped at 1.1260/80. Expect EURUSD to extend its sideways-trend into tomorrows session where the US jobs data take center-stage.

Market Highlights
Indicative Spot Rates

Indicative Forward Rates

Bid
AUDMUR

Bid

Change (Rs.)

Today

Change (Rs.)

26.58

(0.13)

27.83

(0.14)

Offer

1m

3m

6m

1m

3m

6m

AUDMUR

26.55

26.55

26.52

27.85

27.91

28.00
41.57

CNYMUR

5.20

5.47

EURMUR

39.41

39.58

39.80

41.01

41.23

EURMUR

39.37

(0.07)

40.92

(0.08)

ZARMUR

2.55

2.52

2.48

2.67

2.65

2.62

JPYMUR

33.91

(0.21)

35.41

(0.22)

USDMUR

35.16

35.23

35.27

36.60

36.71

36.86

GBPMUR

44.73

44.85

45.02

46.55

46.74

47.04

ZARMUR

2.56

0.01

2.68

0.01

USDMUR

35.15

36.54

GBPMUR

44.70

(0.06)

46.47

(0.06)

EURMUR

EURUSD

GBPMUR

USDMUR

GBPUSD

USD INDEX

1.3600

36.60

97.00

41.05

1.1250

48.80

1.3400

36.55

96.50

40.90

1.1200

48.10

1.3200

36.50

96.00

40.75

1.1150

47.40

1.3000

36.45

95.50

40.60

1.1100

46.70

1.2800

36.40

95.00

1.1050

46.00

1.2600

36.35

11-Sep

16-Sep

21-Sep

26-Sep

1-Oct

6-Oct

11-Sep

Previous Day Trading Levels

16-Sep

21-Sep

26-Sep

1-Oct

GBPUSD

40.45

USDMUR

49.50

GBPMUR

1.1300

6-Oct

USD INDEX

41.20

EURUSD

EURMUR

Offer

Today

94.50
11-Sep

16-Sep

21-Sep

26-Sep

1-Oct

6-Oct

Today

Major Indices

Value at Close

Day Change %

Opening

High

Low

Latest

DOW JONES

18,168.45

0.62

AUDUSD

0.7620

0.7623

0.7595

0.7605

S&P 500

2,159.73

0.43

EURUSD

1.1203

1.1212

1.1196

1.1199

FTSE 100

7,033.25

(0.58)

GBPUSD

1.2744

1.2759

1.2713

1.2719

DAX

10,585.78

(0.32)

USDJPY

103.48

103.61

103.35

103.57

NIKKEI 225*

16,929.17

0.65

USDCHF

0.9738

0.9755

0.9736

0.9759

HANGSENG*

23,914.78

0.53

USDCNH

6.70

6.70

6.69

6.70

Prior

Major Economic Releases (at GMT)

Date

Time

Country

Event

Period

Actual

Expected

05-Oct

13 45

US

Markit Services PMI

Sep

52.3

51.9

51.9

05-Oct

14 00

US

Factory Orders (MoM)

Aug

0.2%

-0.1%

1.4%

06-Oct

11 30

EU

ECB Monetary Policy Meeting

06-Oct

12 30

US

Initial Jobless Claims

Sep

256K

254K

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.........

6th October 2016.........

FIXED INCOME
News
> Treasury yields strengthened yesterday after an upbeat report showed that US
service sector growth picked up last month.
> According to a government report, the services sector accelerated in September
to the fastest level in 11 months while the employment component grew
sharply.
> While a report on private-sector jobs growth came in slightly below
expectations, investors will wait for the official monthly employment report, due
on Friday, to gauge the health of the labor market.

> The benchmark 10-year US treasury note yield rose to its highest level in
three weeks, advancing 3.5 basis points to 1.718 percent, while the 2-year
note yield gained 2.4 basis points to 0.845 percent, its highest level in more
than a month.
> In Europe, the German 10-year bund yield rose 5 basis points to negative 0.01
percent.
> Tomorrow The Bank of Mauritius will hold auction for Treasury Bills with
maturities of 91, 182 and 364 days and nominal value of MUR 1,000.0 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

0.842

1.253

1.714

Current
Level (%)

Previous (%)

BOM Repo Rate

4.00

4.40

136 to 180

2.55

2.35

UK Bonds

0.109

0.254

0.813

Feds Fund Rate

0.25 - 0.50

0 - 0.50

181 to 240

2.60

2.40

German Bonds

-0.680

-0.525

-0.012

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

-0.388

-0.377

-0.321

-0.212

USD

0.456

0.526

0.868

1.256

GBP

0.244

0.264

0.385

0.535

EURIBOR

-0.381

-0.372

-0.301

-0.202

JIBAR

n/a

7.117

7.358

7.967

2.00
91

Indicative Generic Swap Rates* (%)

1.50

2yr

5yr

7yr

10yr

EURIBOR - 3m

-0.314

-0.239

-0.070

0.238

USD LIBOR - 3m

1.079

1.251

1.385

1.561

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

1360

53.00

1345

51.50

1330

50.00

1315

48.50

1300

47.00

1285

45.50

1270

44.00

1255

42.50
11-Sep

16-Sep

21-Sep

> Oil prices recorded a sharp rise after official US EIA data reported a
draw in US crude inventories for the fifth time in a row. The commodity
however eased back this morning as market players booked profits.

Oil Price

26-Sep

1-Oct

6-Oct

> As per the US Energy Information Administration, US crude stockpiles

dropped 3.0 million barrels to 499.74 million barrels in the week ending
September 30.
Oil Price (USD)

Gold Price (USD)

Gold Price

> Gold rebounded from three-month lows hit during the previous session as
demand for the safe haven rose ahead of nonfarm payrolls tomorrow.

Spot Market

Futures Market

Today

Change ($)

Today

Change ($)

Brent Crude Oil ($)

48.98

0.17

51.59

0.28

WTI Crude Oil ($)

49.58

0.42

49.58

0.42

Gold ($)

1,265.71

(7.61)

1,265.30

(6.80)

Silver ($)

17.74

(0.24)

17.74

0.02

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