Daily Market Report
Today’s market commentary from Andre Botha, Senior Currency Dealer at TreasuryONE:
Last week ended with the President of South Africa announcing the new stimulus plan for the economy. Without announcing drastic measures the key will be the Mid-Term Budget Speech where the shifting of funds will be illustrated into the respective areas that the President has identified as key economic growth areas. It will also be interesting to note what the sectors are that the funds will be drawn from. The Rand reached R14.1800 after the speech before ending the day in the high R14.30’s.
This week the key event will be the FOMC meeting tomorrow, where markets have priced in another rate hike and we expect the Fed to comply to these expectations. The key though would be the conference that would accompany the decision, as to whether the market could gauge the “feeling” of the Fed. Should the Fed sound more hawkish than expected we could see the US dollar retracing some of its losses and EM’s on the defensive but for the most part we expect limited movement after the hike.
Other developments to be noted is first the cancellation of the trade talks between China and the US, and also the prospect of a meeting between the US and Turkey around the release of the pastor. This could provide a bit of two-way volatility during the day, but we expect the Fed to rule the roost this week.
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