US inflation data released yesterday came out in line with expectations and appeared to confirm that the recent spike is transitory. The Dollar subsequently gave back some gains, and we saw commodity prices bounce and a recovery in EM currencies. The Rand, which had flirted with the R14.90 level earlier in the day, firmed to close 1.0% stronger at R14.65. This morning the Rand is slightly weaker at R14.67 in a tight Asian trading session but remains the top EM performer.
Gold and Platinum recovered 1.35% and 2.0% respectively yesterday after the US CPI number, while Palladium was flat and Copper 1.0% stronger. This morning all three metals are trading essentially unchanged at $1,752 for Gold, $1,024 for Platinum, and $2,646 for Palladium. The US called for OPEC to increase their Oil output, raising some supply concerns and pushing the oil price higher. Brent is currently trading at $71.50 and WTI at $69.30.
The Dollar retreated slightly yesterday post the CPI number but is holding near the recent 4-month highs. The DXY is back below 93.00 at 92.90 this morning, with the Dollar trading unchanged at 1.1747 against the Euro and 1.3870 against the Pound. US Treasury yields firmed yesterday with the 10y yield closing at 1.30%; however, this morning, we are back at 1.35% while the 30y is at 2.00%. The S&P and Dow both closed higher while the Nasdaq was marginally softer. US futures are flat this morning, and Asian-Pacific markets are all weaker. The JSE finished flat after gains in the Resource sector were offset by losses for the Industrials. Today we have UK GDP, and US Jobless claims releases to look forward to.