Market Update.....

11th August 2020.....

FOREIGN EXCHANGE MARKET

News
> The greenback traded higher on hope that the Democrats and Republicans would
reach a deal on stimulus negotiations amid US President Donald Trump signing an
executive order on Saturday to support the economy.
> EUR/USD dropped to session lows at 1.1737 while today focus will be on the
August German ZEW Survey on economic sentiment while the US will publish
August PPI data.
> The pound traded at a high of 1.3103 against the dollar but still short of last week
5 month high at 1.3185. Latest UK employment figures are expected today.
> The USD/JPY pair peaked at 106.20, a four-day high on the back of resurgent
dollar demand.
> The Canadian dollar strengthened as commodity prices climbed and domestic
data showed the first annual increase in consumer spending in five months.
> The ZAR touched a new low of 17.8 against the US dollar on Monday, a level not
seen since May 22nd, due to escalating tensions between Washington and Beijing.
> The Bank of Mauritius injected another USD 50 Mio on the domestic foreign
exchange market yesterday at the ask rate of MUR 39.75/USD. The Central Bank
is committed to meet the increasing demand on the market.
> For the first week of trading this month, the market turned over approximately USD
184.5 Mio, with demand surpassing supply by nearly UDS 95 Mio. With the injection of
USD 100 Mio by the Central Bank, the market traded long over USD 5 Mio as at start of
business yesterday.
> The USD/MUR gains 7 cents this morning while the EUR/MUR sheds 10 cents on a
bullish dollar on the international market. The GBP/MUR sees a 16-cent hike with
the cable trading at 1.3090 at time of writing.

Daily Technical View

EUR/USD - The correction lower in the pair almost reached the first target of 1.1700 (Low 1.1723) as the greenback benefited from a rebound in US yields. Intra-day we expect
some consolidation in the 1.1700-1.1825 range and we need to see a clear break of 1.1700 for the next leg lower towards 1.1640 FIBO support.

Market Highlights
Indicative Spot Rates Indicative Forward Rates
Bid Offer Bid Offer
Today Change (Rs.) Today Change (Rs.) 1m 3m 6m 1m 3m 6m
AUDMUR 28.06 0.09 29.18 0.09 AUDMUR 28.05 28.02 27.97 29.21 29.26 29.33
CNYMUR 5.65 0.03 5.94 0.03 EURMUR 45.95 45.97 45.99 47.36 47.46 47.64
EURMUR 45.93 (0.10) 47.31 (0.10) ZARMUR 2.18 2.17 2.15 2.33 2.32 2.31
JPYMUR 36.68 (0.03) 38.15 (0.03) USDMUR 39.29 39.26 39.20 40.22 40.26 40.32
ZARMUR 2.19 - 2.33 - GBPMUR 51.16 51.14 51.09 52.74 52.82 52.94
USDMUR 39.30 0.07 40.20 0.07
GBPMUR 51.17 0.15 52.71 0.16

EURMUR EURUSD GBPMUR GBPUSD USDMUR USD INDEX

47.85 1.1950 53.00 1.3180 40.55 97.00

47.40 1.1824 52.48 1.3034 40.44 95.96

46.95 1.1698 51.96 1.2888 40.33 94.92

EURMUR

GBPMUR

USDMUR

USD INDEX
EURUSD

GBPUSD

46.50 1.1572 51.44 1.2742 40.22 93.88

46.05 1.1446 50.92 1.2596 40.11 92.84

45.60 1.1320 50.40 1.2450 40.00 91.80

17-Jul 22-Jul 27-Jul 1-Aug 6-Aug 11-Aug 17-Jul 22-Jul 27-Jul 1-Aug 6-Aug 11-Aug 17-Jul 22-Jul 27-Jul 1-Aug 6-Aug 11-Aug

Previous Day Trading Levels Today Major Indices Value at Close Day Change %
Opening High Low Latest DOW JONES 27,433.48 1.30
AUDUSD 0.7150 0.7185 0.7146 0.7165 S&P 500 3,360.47 0.27
EURUSD 1.1736 1.1756 1.1723 1.1738 FTSE 100 6,050.59 0.31
GBPUSD 1.3076 1.3096 1.3066 1.3069 DAX 12,687.53 0.10
USDJPY 105.95 106.17 105.93 106.15 CAC 40 4,909.51 0.41
USDCHF 0.9155 0.9168 0.9148 0.9162 NIKKEI 225 22,743.50 1.85
USDCNH 6.96 6.97 6.94 6.95 HANGSENG 24,937.16 2.30

Major Economic Releases (at GMT)

Date Time Country Event Period Actual Expected Prior
11-Aug 08 30 UK Unemployment Rate Jun - 4.2% 3.9%
11-Aug 12 30 US Core PPI (MoM) Jul - 0.1% -0.3%
12-Aug 06 00 UK GDP (QoQ) Q2 - -20.5% -2.2%
12-Aug 12 30 US Core CPI (MoM) Jul - 0.2% 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

FIXED INCOME
News
> Long-term US Treasury yields ticked higher yesterday as market participants made
room for this week’s record auctions of government bonds, which will finance the
response to the COVID-19 pandemic.
> This week, bond traders will take down a wave of bond supply, after the Treasury
Department increased the size of all of its major debt auctions to their highest
levels last week. The US Treasury will sell USD 112 billion of notes and bonds
across maturities ranging between three years and 30 years this week.
Market Update.....
11th August 2020.....
> President Donald Trump issued an executive order and memorandums over the
weekend aimed at boosting the US economy. He announced an extension of federal
unemployment benefits to USD 400 a week and ordered that companies will be able
to avoid paying payroll taxes.
> The 10-year US Treasury note yield rose to 0.573 percent, while the two-year note
traded at 0.129 percent after trading at 0.127 percent at the end of last week.

> Without significant catalysts for trading, supply played a part in putting pressure
on the bond market yesterday as dealers and traders priced in a “concession,” in
effect, lifting yields to accommodate the new issuance.

Market Highlights
Local Secondary Market T-Bills Local Secondary Market T-Bonds Key Central Bank Rates
Bid (%) Offer (%) Bid (%) Offer (%) Current (%) Previous (%)

1M 0.35 0.20 2 year 1.60 1.40 BOM Repo Rate 1.85 2.85

2M 0.35 0.20 3 year 1.80 1.60 Fed Funds Rate 0.00 - 0.25 0.00 - 0.25

3M 0.35 0.20 4 Year 1.95 1.75 BoE Bank Rate 0.10 0.10

4M 0.40 0.25 5 Year 2.15 1.90 ECB Ref. Rate 0.00 0.00

6M 0.40 0.25 10 Year 2.60 2.35 RBA Cash Rate 0.25 0.25
8M 0.40 0.25 15 year 2.90 2.65

10M 0.45 0.30 20 Year 3.20 2.95 Government Benchmark Yields (%)
1Y 0.45 0.30 2 Year 5 Year
Click here to access our Mauritian Bond Market page
US Bonds 0.1329 0.236
Local Treasury Bills Market UK Bonds -0.029 -0.072

1.15 German Bonds -0.704 -0.711

Money Market Rates

0.95
LIBOR* (%) 1 Week 1 Month 3 Months 6 Months
Weighted Average Yield

364 EUR -0.550 -0.528 -0.471 -0.457

0.75
USD 0.112 0.163 0.253 0.309

182 GBP 0.055 0.061 0.073 0.124

0.55
EURIBOR -0.525 -0.510 -0.478 -0.418
* LIBOR rates delayed by 48 hours. Source: ICE
91
0.35
Indicative Generic Swap Rates* (%)
Tenor 2yr 5yr 7yr 10yr
EURIBOR - 3m -0.475 -0.447 -0.388 -0.273
0.15
3-Apr 21-Apr 9-May 27-May 14-Jun 2-Jul 20-Jul 7-Aug USD LIBOR - 3m 0.235 0.317 0.424 0.597
*Pay fixed and receive floating swap

COMMODITIES
Rolling Gold & Oil Prices News
Gold Price Oil Price > Gold prices moved further away from all-time high, pressured by a stronger US
2,070 45.50 dollar following Beijing sanctions on US officials while investors keep an eye
over stimulus plans in the US.

2,009 44.90 > Oil prices advanced, with Brent crude and WTI trading around 45.18 and 42.22
respectively on recovering demand in Asia and hopes for more US stimulus.
Today, markets look ahead to forecasts from the International Energy Agency
Gold Price (USD)

Oil Price (USD)

1,948 44.30 on US oil production.

1,887 43.70

Spot Market
1,826 43.10
Today Change ($)

Brent Crude Oil ($) 43.80 (0.75)

1,765 42.50
17-Jul 22-Jul 27-Jul 1-Aug 6-Aug 11-Aug Gold ($) 2,003.50 (23.76)
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