Daily Market Report 28th Oct 2014 GLOBAL MARKET INSIGHT USD: The US dollar nursed modest losses, having slipped broadly in a sluggish session overnight on expectations of more dovish comments from the Federal Reserve. Moreover, US September pending home sales gained 0.3 percent after falling 1.0 percent in August. EUR: The euro recovered lost ground in limited trade on Monday, boosted by weaker than expected US Housing Data that softened a blow to the currency from news that German business morale fell. GBP: Sterling rose against the dollar on Monday, boosted by robust British retail sales data and expectations that the Federal Reserve will emphasize this week that US interest rates are likely to stay lower for longer. JPY: The greenback eased to 107.83 yen, retreating from Monday’s near three week peak of 108.38. ZAR: South Africa’s rand weakened slightly on Monday against a stronger dollar, although the currency did manage to hold below the crucial 11.00 mark ahead of a busy data week that should set its short term course. The rand has managed to hold on to some of the gains that saw it touch month-lows against the dollar after the budget speech, but gave up some ground after improved sales of new houses boosted the US currency. OVERVIEW OF MAURITIAN MARKET Yesterday, the Monetary Policy Committee (MPC) of the Bank of Mauritius has unanimously decided to keep the Key Repo Rate (KRR) unchanged at 4.65 percent per annum. The MPC noted that the global economy would recover from 3.3 percent in 2014 to 3.8 percent in 2015, but growth would remain uneven across various countries and regions. Data watch today Data Yesterday Data USD MARKIT US SERVICES PMI (OCT) EUR GERMAN BUSINESS CLIMATE (OCT) GBP CBI REPORTED SALES (OCT) BOND BUZZ AND MONEY MARKET US Treasuries rallied as a disappointing IFO report from Germany heightened concerns over the growth outlook in the eurozone and boosted demand for safe harbour assets. The two-year note yield is lower by 0.8bps to 0.378%. The 10-year bond yield is off 1.3bps to 2.255%. Actual Forecast 57.3 57.8 103.2 31 104.5 25 Preview Data Forecast 58.9 USD DURABLE GOODS ORDERS (SEP) 104.7 USD CONSUMER CONFIDENCE (OCT) 31 0.5% 87 EUR GERMAN IMPORT PRICE INDEX (YOY) (SEP) -1.9% preview -18.4% 86 -1.9% Importance HIGH HIGH MEDIUM Market Levels Currency Latest EUR/USD 1.2710 GBP/USD 1.6128 USD/ZAR 10.9585 USD/JPY 107.85 USD/INR 61.37 USD/MGA 2720 Currency Latest USD/MUR 31.70 EUR/MUR 40.43 GBP/MUR 51.27 ZAR/MUR 2.92 INR/MUR 0.5194 MGA/MUR 1.23 EQUITY TODAY DJIA 16817.94 NASDAQ 4485.933 FTSE100 6363.46 NIKKEI1225 15374.46 SEMDEX 2129.88 BRENT 85.23 GOLD 1228.45 SILVER 17.16 Change - Change - - Change INTEREST RATES LIBOR RATES FED 0.25% ECB 0.05% BOM REPO 4.65% RBI REPO 8.0% BCM REPO 9.5% Trading Idea for the Day Sell EUR/USD at 1.2760, stop loss at 1.2795 and take profit at 1.2630 3M 6M USD 0.23310 0.32290 EUR 0.06286 0.15000 GBP 0.55338 0.68375 International Bond: Axis Bank Ltd provides the full range of banking services throughout India. The group activities include retail banking, investment management, merchant banking, treasury and NRI services, cash and credit management services, and ATM facilities. 7.25% Axis Bank USD bond with maturity 12 Aug 2021 is trading at 105.85. Light Crude: CMP 81.00: Crude is consolidating since last one month. Currently crude short term support at 79.00 and resistance 82.00. We expect this range bound scenario to continue for next few more days. Disclaimer: This report has been prepared by members of the Financial Markets Division of the SBM Bank (Mauritius) Ltd, who are not considered as research analysts and information contained therein should not be considered as “research” as that term is defined by applicable regulations. Information has been collected from sources believed to be reliable and in good faith by the bank, but no representation or warranty, expressed or implied, is made as to their accuracy, completeness or correctness. The information may include opinions, estimates, indicative rates, terms, price quotations and projections which reflect existing market conditions and are subject to change, modification or amendment without any prior notice and may vary from views expressed by other members and reports of the bank or any other institution. The analysis and data compilations contained therein are based on numerous assumptions; different assumptions could result in materially different opinions. Contact Us: PV RAO (+230 202 1353) P.BHATTACHARYA R.SOOBROYDOO (+230 202 1507) (+230 202 1633) Or Reach us at [email protected]