The SARBs MPC raised the repo rate by 0.25% to 3.75% in what is seen as a pre-emptive move as inflationary pressures are on the upside. However, the SARB’s outlook is still relatively dovish, and this appears to have disappointed markets, which, along with the contagion from the rate cut in Turkey, saw the rand come under pressure. The local currency touched R15.75 at one point before recovering at the close as exporters took advantage of the weaker Rand. This morning, the rand is trading at R15.64, and we expect an R15.55/R15.75 trading range for now.
A poor day for most metals yesterday, with Gold, Platinum, and Palladium all closing in the red. Prices have recovered this morning, with Gold back at $1,864, Platinum up at $1,066, and Palladium up at $2,151. Brent and WTI have recovered slightly from yesterday’s weaker levels but still, look like finishing in the red for the week. Brent is currently quoted at $81.77 and WTI at $79.50.
The dollar retreated a touch yesterday in the absence of any fresh drivers, pushing the DXY down to 95.54. This morning we have the DXY at 95.65, with the dollar trading at 1.1355 against the euro and 1.3490 against the pound. US bond yields are flat while Wall Street closed mixed. US futures have opened around 0.4% stronger this morning, and Asian markets are mainly in the green except for the Hang Seng, which has lost 1.75% on poor earnings from Alibaba. The ALSI closed reasonably flat for the second day in a row, finishing at 70,867. There are no major economic data releases due out today.