Overnight we saw the rand break out of its narrow range as the market turned bearish towards riskier assets with a massive sell-off in the US equities market. This morning, the rand is at R15.97 after touching R16.08 overnight. Locally we have our SARB meeting this afternoon, with the market mostly pricing in a 50bps hike. Anything less than that, one can expect the rand to trade at vulnerable levels and perhaps have another stint back above R16.20.
Gold is trading flat this morning at $1,813, with the focus still being on interest rates in the US. Platinum is down 0.8% while palladium is up 0.5%. Further down the board, we see Copper hovering just below $9,300 after losing over 1.15% yesterday. Brent Crude prices were all over the show yesterday, closing just above $108 per barrel. It has gained 1% for the day and is seen quoted at $110.30.
The dollar saw some safe-haven flows as equity markets fell under pressure as growth concerns hit the riskier assets. The S&P 500 fell the most in a single day since 2020, while the tech-heavy Nasdaq lost 4.7%. The sell-off spilt over into Asian markets as we see the Hang Seng down 2.2% and Japan’s Nikkei 1.7% in the red. The sell-off saw a rotation into bonds and led to the 10yr US Treasury shedding 9bps after topping at 3% yesterday. This morning we have the 10yr quoted at 2.91%, the 30yr at 3.08% and the 5yr yields on 2.91%. The dollar also benefitted from the move, and we saw it snap back against the euro and the pound. The greenback fell under pressure against the pound, which traded close to 1.25 yesterday, but trades at 1.2380 this morning. The euro is quoted below 1.05, coming off the 1.0550 highs earlier this week.