Today’s market commentary from Andre Botha, Senior Currency Dealer at TreasuryONE:
The fallout of the Fed’s change in stance from dovish to neutral is still the main driver of markets at the moment, and yesterday we saw EM’s bearing the brunt of the move yesterday. The Rand traded at a high of R14.57 yesterday as thin liquidity conditions of the short trading week exacerbated the weakness in the Rand. another reason possibly for the thin liquidity conditions is that the market is adopting a wait and see approach before the local elections on the 8th of May. This could mean that we are in for a bumpy ride in the next couple of days.
The big event for the day is the US non-farm payroll number that will be released in the afternoon. The consensus forecast is that the number will print at 185,000 but more importantly will be the wage inflation number that is expected to print at 0.3% month-on-month. Should both number be exceeded we could see the Rand firmly on the back foot and vice versa. The significance of the non-farm payroll number has increased especially in light of the Fed’s change in tone earlier this week