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TRADERS DESK - December 9, 2022

Published: October 20, 2023By:
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Foreign Exchange Market Update

  • The FX market continued to show moderate liquidity week over week with a slight depreciation of $J (0.05%) to satisfy the requests for end-users and institutional clients.
  • There was no B-FXITT intervention from the Bank of Jamaica (BOJ) for this week.
  • Week over week, USD demand was comparatively slow with the anticipation that this will continue for the remainder of the year.
  • We also expect the market to remain quiet for the remainder of the year with the disruptions expected based on long weekends around the holiday season.
  • For the week beginning December 12, 2022, we expect the JMD to lose momentum as businesses focus on setting payroll and bonus payments.

Weighted Avg BOJ Rate

CurrencyJ$/USD
02-Dec$154.51
09-Dec$154.59
WoW Var (%)0.05%
CurrencyJ$/GBP
02-Dec$187.81
09-Dec$187.42
WoW Var (%)-0.21%
CurrencyJ$/CAD
02-Dec$115.65
09-Dec$113.84
WoW Var (%)-1.57%

Bond Market Update

  • For this week we continued to see a rally in prices of risk assets including the emerging market bonds following the release of the job market results in the prior week. Results printed stronger than expected.
  • Shorter dated bond prices remained relatively flat for the week with the exception of longer dated bonds.
  • Bond prices saw increases of 1.50% and 3.15% for JAMAN 45 and JAMAN 39 respectively, while the 25’s and 36 on average remained stable week over week.
  • With the anticipation of a softer policy rate hike this week from the U.S Fed, we expect prices to continue on their upward trend barring any deviation from expectations.
  • Following the CPI information that was released early this week, with consumer price index coming out just 0.1% higher than the previous month, we expect to see a boost in the market as the economy begins to loosen up.
JAMAN 2025
02-Dec$106.25
12-Dec$106.00
YTM5.11%
Change Wow-0.24%
JAMAN 2025
02-Dec$111.25
12-Dec$111.50
YTM4.87%
Change Wow0.22%
JAMAN 2028
02-Dec$109.25
12-Dec$110.00
YTM4.63%
Change Wow0.69%
JAMAN 2036
02-Dec$114.50
12-Dec114.75
YTM6.79%
Change Wow0.22%
JAMAN 2039
02-Dec$119.00
12-Dec122.75
YTM5.82%
Change Wow3.15%
JAMAN 2045
02-Dec$117.00
12-Dec118.75
YTM6.31%
Change Wow1.50%

Money Market Update

  • Interest rates on the short term overnight rates (< 30 days) remain on a downward trend with a range of 7.5% - 8.25% on the lower end, a slight downtick compared to the previous week.
  • The JMD market showed a slight increase in liquidity for the period. The market saw a reduction in demand for JMD for shorter term funds while the longer term funds remained stable.
  • The rates on longer tenures decreased slightly ranging from 8.75% - 8.90%.
  • The BOJ 7.50% Fixed Rate 30-day Certificate of Deposit auction for the allocation of J$19.5B was oversubscribed, with total value received amounting to J$25.4B. The average yield for successful bids was 9.08%, with highest submitted bid rate of 12.00% and lowest of 7.75%.
  • Week over week, USD rates remained relatively flat with sufficient liquidity with rates ranging between 3.75% - 4.25% for shorter tenures with longer tenures seeing rates between 3.85% - 4.40%.
  • For the week starting December 12, 2022, the expectation is that both the JMD & USD liquidity will remain moderate while the market awaits information surrounding the FED decision this week.
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