HATTON NATIONAL BANK – TREASURY DIVISION
Level-11, HNB Towers, 479, T.B.Jayah Mawatha, Colombo 10
HNB TREASURY
COMMENTARY
Tel: FX: 2664843-6 (Priyantha/Sanka)
Fax: 2664854
Interest
. Rates:`2664850-3 (Priyantha / Manjulie)
E-mail: [email protected] Fitch Rating: AA-(lka.) 11 July 2017
December
2016
U.S. U.S.
FOREIGN EXCHANGE MARKET
USD/LKR
USD/LKR (spot) quoted within a range of 153.25-154.00 on Monday.
FOREX MARKET
The dollar's advance against its major peers slowed early today as a rise in
sovereign bond yields paused, with investors awaiting comments from Federal
Reserve Chair Janet Yellen for fresh cues on policy direction. The dollar was
0.1 percent higher at 114.160 yen following a rise to a two-month high of
114.300 overnight. With U.S. yields free to rise, the spread between 10-year
Treasury and JGB yields is the widest it has been in two months, contributing
to the dollar's strength against the yen. The euro was effectively flat at $1.1397
after inching down about 0.1 percent the previous day. Sterling traded close to
a two-week low on Monday, with a run of lackluster data casting doubt over
the Bank of England's recent warnings that it is on the verge of raising
borrowing costs. Sterling traded as low as $1.2855 on Monday, its weakest
since June 28, before edging up to $1.2878. That was still down 0.1 percent on
the day. It was flat against the euro at 88.51 pence. The Australian and New
Zealand dollars got nowhere against their U.S. counterpart on Monday, but
gained on a weakening Japanese yen as the outlook for interest rates globally
continued to diverge. The Australian dollar was stuck at $0.7610, well off the
recent high of $0.7712. It got as low as $0.7573 on Friday when an upbeat
report on U.S. jobs added to the case for a further rise in rates there and
pushed up Treasury yields. The Aussie was up at 86.85 yen on Monday having
touched a four-month peak of 86.95 last week. The next target is the 88.17 top
hit in February and a break there would take it to territory not trod since late
2015.The New Zealand dollar was already at its highest since January at 83.03
yen. The kiwi had less luck on the U.S. dollar, idling at $0.7270 .
COMMODITY MARKETS
Gold edged lower early Today on a firmer dollar after touching near fourmonth lows in the previous session as the market waits for cues from the
central bank on the path of U.S. interest rate hikes. Spot gold fell 0.2 percent
to $1,212.01 per ounce. It hit a low of $1,204.45 in the previous session, its
lowest since March 15. U.S. crude inventories fell by 2.1 million barrels in the
week to July 7, dealers said on Monday, citing energy monitoring service.
EXPECTED INTRA-DAY RANGES FOR TODAY
SPOT RATES
USD/LKR
153.40-154.00
EUR/USD
1.1394-1.1396
GBP/USD
1.2878-1.2880
USD/JPY
114.10-114.13
USD/CAD
1.2890-1.2891
AUD/USD
0.7609-0.7611
USD/SGD
1.3840-1.3845
USD/INR
64.45- 64.50
GOLD
1,211.00-1,211.25
CRUDE
44.56-44.60
LIBOR %
EUR JPY
USD
1M 1.22
3M 1.30
6M 1.47
1Y 1.75
(0.40)
GBP
(0.02)
0.25
0.30
0.45
0.66
(0.37) 0.01
(0.31) 0.01
(0.18) 0.11
T/BILL RATES %
(W. Av. Last Auction)
3Months
6Months
12Months
9.60
10.26
10.45
T/BOND RATES %
(W. Av. Market rates)
2 Year
3Year
4 Year
5 Year
6 Year
7 Year
8Year
10.60
10.80
11.20
11.25
11.27
11.33
11.35
8.75
CLIBOR%(10/07/17)
SLIBOR % (10/07/17)
Overnight
8.75
1 Week
9.46
1 Month
10.50
3Months
11.26
6Months
11.92
MONEY MARKET RATES
EUR/USD – A range of
GBP/USD – A range of
AUD/USD – A range of
USD/JPY
– A range of
MARKET WATCH
* U.S. Wholesale inventories
1.1380-1.1400
1.2870-1.2900
0.7600-0.7620
114.10-114.25
May
MONEY MARKET
LOCAL MARKET
Overnight call-money traded at 8.75% on Monday. Net market liquidity with
the Central Bank was a Deficit of Rs 11.70 Bn on Monday from a Deficit of
Rs 15.09 Bn on Friday.
U.S. TREASURIES
U.S. Treasury yields slipped on Monday, in line with weak European markets,
as sharp gains following Friday's strong U.S. non-farm payrolls report
prompted investors to consolidate positions. Benchmark 10-year Treasury
yields fell to 2.373 percent, from 2.393 percent last Friday.
Overnight
1 Week
2 Weeks
3 Weeks
1 Month
8.75
9.00 – 9.25
9.50 – 9.75
9.75– 10.25
10.25– 11.00
AWPLR %
Week ending 07/07
11.40
Week ago
11.70
Year ago
10.70
AWDR %
June 2017
9.13
May 2017
8.99
Year ago
6.87
INFLATION (%)
YoY
May 17
(NCPI)
7.10
April 17
(NCPI)
8.40
YoY 12M W. Av
June (CCPI)
6.10
5.50
May (CCPI)
6.00
5.50
Year ago (CCPI) 5.50 5.10
The above material is for your information only. HNB does not accept any responsibility for the accuracy or completeness of above and any loss arising from
any use of this material.
(Sources: Reuters, Bloomberg)