Treasury Market Update Ma Foreign Exchange (FX) Latest Market News > The Single currency initially dropped to $ 1.2584 after the release of weaker than expected German industrial output but it rallied to $ 1.2682 due to broad based weakness of the Greenback on the sell off in US equities. Focus is now on FOMC meeting minutes to be released later today. > The JPY edged higher trading at 107.75 per dlr after Japanese business leaders stated that the yen sharp depreciation was boosting costs of fuel and raw ma terials spelling trouble for the economy. > The Pound Sterling firmed to $ 1.6117 after UK manufacturing production rose 0.1 pct in August and was also supported by cross buying of GBP against EUR. > The Rand remained strong trading around to 11.22 level per dlr boosted by a rise in business confidence in September and as emerging markets recovered after a recent bout of global risk aversion. > The AUD retreated to USD 0.8785 from USD 0.8831in Asian market this morning after below than expected China services PMI for September which came in at 53.5 rom 54.1 in August. > Against the MUR, the USD opens unchanged this morning trading at MUR 31.76 while the, AUD, EUR, JPY,ZAR and GBP gain 8, 7,21,1 and 6 cents respectively. Daily Technical View EUR/USD: Another whippy session with the pair trading in a 100 pips range (1.2585-1.2681), the attempt to break below 1.2500 was short-lived as the market squeezed back to the day’s high. Intraday we look to play the 1.2595-1.2680 range with a tight S/L of 30 pips either side. Mauritian Rupee (Indicative Spot Rates) Buying Today Previous AUD 26.65 EUR GBP Mauritian Rupee (Indicative Forward Rates) Selling Change USD/MUR Change EUR/MUR Today Previous Buy Sell Buy Sell 26.57 27.98 27.90 1 month 30.900 31.834 39.018 40.246 38.98 38.92 40.15 40.08 49.55 49.49 51.03 50.97 JPY 28.01 27.81 29.49 29.28 2 month 3 month 6 month 30.929 30.959 31.039 31.921 32.022 32.369 39.054 39.095 39.280 40.360 40.497 40.982 USD ZAR 30.84 2.71 30.84 2.70 31.76 2.86 31.76 2.85 Spot Rates - Rolling Five Day Chart (Mid-rates) 1.2700 1.6265 Latest Bid - Ask: 1.2627 - 1.2630 1.2670 USD/MUR GBP/USD EUR/USD Latest Bid - Ask: 1.6058 - 1.6062 1.6215 1.2636 1.2640 31.38 31.30 31.35 1.6165 31.32 1.2610 1.6063 1.6115 31.29 1.2580 1.2550 1.2520 1.6065 31.26 1.6015 31.23 1.5965 1.2490 2 Oct 3 Oct 6 Oct 7 Oct 31.20 2 Oct 8 Oct 3 Oct Market Highlights (v/s USD) New York 6 Oct 7 Oct 8 Oct 2 Oct 3 Oct 6 Oct 7 Oct 8 Oct Renminbi Focus (Indicative rates) Far East Latest CNY/MUR USD/CNY Buy Sell Buy Sell Spot 4.920 5.170 6.143 6.145 1 month 4.922 5.174 6.157 6.159 4.902 5.195 6.185 6.188 Low High Low High Low High AUD* 0.8729 0.8833 0.8763 0.8828 0.8753 0.8828 GBP* EUR* 1.6029 1.2585 1.6128 1.2681 1.6056 1.2629 1.6106 1.2683 1.6053 1.2623 1.6106 1.2683 3 month CHF 0.9558 0.9624 0.9557 0.9595 0.9557 0.9598 JPY 107.84 109.22 107.76 108.46 107.76 108.53 * AUD, GBP and EUR are the base currencies Today’s Major Announcements (at GMT) 18 00: US - FOMC Minutes 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.com, FT.com, GBOT, CME, and Bank of Mauritius 8th October 2014 Treasury Market Update Ma earn Fixed Income (FI) Latest Market News Local Market: International Market: > The last T-bills auction was held on 03 October 2014 by the BOM for a nominal amount of MUR 1,000 million. Bidding for only the 91-days maturity was offered. Out of the 28 bids received (representing MUR 3455.0 m), 9 were accepted for a nominal amount of MUR 1300.0 million. > Treasuries dropped for the first time in three days on speculation that a Fed eral Reserve report today on its latest meeting will increase bets that policy makers plan to raise interest rates in 2015. > The Treasury’s sale of $27 billion of three-year notes saw the strongest bidding in eight months, as the International Monetary Fund cut its outlook for global growth, fueling demand for the safety of U.S. debt. > The auction of the 3.88% 3-Year Government of Mauritius Treasury Notes (ReThe bid-to-cover ratio, which gauges demand by comparing total bids with the opening) was held on 24 September 2014 by the BOM for a nominal amount of amount offered, was 3.42, matching the most since February and versus an MUR 1,200 million. Out of the 38 bids received (representing MUR 3,540.00m), 15 average of 3.32 for the past 10 sales. were accepted for MUR 2,000.00 million. The weighted yield on the bonds was > The weighted yield for the 91-day maturity was 1.07% p.a. 3.09% p.a. and the coupon rate was 3.88 % p.a. Money & Swap Markets Local Secondary Market Rates Government Benchmark Bond Yields Yield at which we Days to maturity Buy (%) Sell (%) 91 to 135 1.35 1.15 136 to 180 1.50 1.30 181 to 240 1.60 1.40 241 to 300 1.70 1.50 301 to 364 2.25 2.05 International Markets Rates 1 Week 1 Month 3 Month 6 Month EUR -0.031% 0.002% 0.052% 0.145% USD 0.119% 0.153% 0.231% 0.328% GBP 0.483% 0.506% 0.563% 0.710% EURIBOR -0.019% 0.007% 0.079% 0.179% 2 Year 5 Year 10 Year US Bonds 0.508 1.624 2.341 UK Bonds 0.750 1.631 2.289 German Bonds -0.064 0.154 0.906 Change in LIBOR (Today v/s Previous) LIBOR: 2yr 5yr USD 0.003 0.001 Indicative Generic Swap Rates* Tenor EUR 0.004 -0.001 7yr 10yr 12yr 15yr -0.002 EURIBOR - 3m 0.101% 0.338% 0.605% 1.007% 1.223% 1.460% -0.004 USD LIBOR - 3m 0.794% 1.830% 2.190% 2.519% 2.669% 2.815% -0.005 *Pay fixed and receive floating swap 1 Week 1 Month 3 Month 6 Month Key Interest Rates ` % per annum Cycle Current level View & Start date Level Last Move Next Expr Move 4.65 Easing: 28 Sept 08 8.25 June 13 (-0.25) Q3 2014 Feds fund rate 0 - 0.25 Easing: 17 Sept 07 5.25 Dec 08 (-0.75 -1.00) Q2 2015 BOE bank rate 0.50 Easing: 6 Dec 07 5.75 Mar 09 (-0.25) Q3 2014 ECB refinancing rate 0.15 Tightening: 7 Apr 11 1.00 Jun 14 (-0.10) Q4 2014 China: Working capital rate 6.00 Tightening: 19 Oct 10 5.31 Jul 12 (-0.31) Q3 2014 India: Repo rate 8.00 Tightening: 19 Mar 10 4.75 Jan 14 (+0.25) Q4 2014 BOM Repo rate 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.com, FT.com, GBOT, CME, and Bank of Mauritius th *Previous trading prices 8 October 2014 Treasury Market Update Ma earn Commodities Latest Market News > Gold edged higher this morning to trade above the USD 1,210.00 level both on the spot and futures markets. > The bullion extended gains to a third session today as growing concerns over the global economy prompted safe-haven bids, while the return of top consumer China from a week-long holiday also lifted prices. > The Yellow metal was well-bid as stocks fell after the IMF cut its global economic growth forecasts for the third time this year yesterday, warning of weaker growth in core euro zone countries, Japan and big emerging markets like Brazil. > Crude Oil prices eased during the Asian trade session with Brent diving below the USD 91.00 mark and WTI sliding below USD 88.00 both on the spot and futures markets. Spot & Futures Markets (in USD) Energy: - Brent Crude Oil - WTI Crude Oil Metals: - Gold - Silver - Copper > Crude oil prices fell in early Asia tradingthis morning as industry data showed a solid build in U.S. crude oil stocks. The American Petroleum Institute showed a 5.1-million-barrel gain in oil supplies in the past week in data released late yesterday, a 2.5-million-barrel build in gasoline stocks and a 1.1-million-barrel decline in distillate inventories. > WTI for November delivery decreased as much as $1.46 to $87.39 a barrel in electronic trading on the New York Mercantile Exchange, while Brent for Noember settlement slid as much as $1.35, or 1.5 percent, to $90.76 a barrel on the London-based ICE Futures Europe exchange. The European benchmark crude traded at a premium of $3.16 to WTI, compared with $3.26 yesterday. > International Monetary Fund reduced the forecast for global economic growth. Sentiment across the board was lower after the downgrade which was primaryly due to underperforming Europe and Japan. Global growth is now set for 3.3 percent this year and 3.8 percent the year after. Minutes of the Federal Reserve's last policy meeting are due later today and market players will be acutely sensitive to how the debate between hawks and doves on the committee was playing out. Today Spot Market Previous 90.77 87.97 92.50 90.21 ICE CME 90.89 87.65 92.63 90.20 1212.67 1205.36 1213.00 1205.60 17.24 17.40 17.20 17.31 3.04 3.03 COMEX COMEX CME 3.02 3.03 Change Futures Market Today Previous Source Change Oil & Gold Focus Rolling Five Day Gold & Oil Prices Gold Price (LHS) 1223 Oil Price (RHS) 94.9 13.40 94.2 1215 1212.67 93.5 13.20 1207 92.8 1199 92.1 1191 91.4 1183 90.77 1175 90.7 90.0 2 Oct 3 Oct 6 Oct 7 Oct 8 Oct 13.36 13.30 Oil Price (USD) Gold Price (USD) Bullish/Bearish Indicator† 13.10 13.00 12.90 12.80 2 Oct 3 Oct 6 Oct 7 Oct 8 Oct † Ratio of spot gold price (proxy for financial markets) to spot oil price (proxy for real economy), with a Contact Us: high ratio indicating that financial markets are bearish and vice-versa [email protected] 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.com, FT.com, GBOT, CME, and Bank of Mauritius th *Previous trading prices 8 October 2014