“Yes they can control the weather. It’s ridiculous for anyone to lie and say it can’t be done.”? Interesting comments by US congresswoman Taylor Greene who suggests that “they” are able to control weather patterns with the recent hurricane Helene being used to damage republican states ahead of the elections.?
These are the mid rates at 5:50 today:
Brent Crude = $79.65 per barrel
- No controversy for the Rand as we started the week in a rather sedate manner yesterday.? We opened at R17.49 to the Dollar and quickly moved to R17.40 before drifting sideways in and around this level for the rest of the day.?
- After hitting a two month high of 102.69 on Friday thanks to the blowout US jobs report the Dollar Index pulled back slightly to 102.46 yesterday before also drifting sideways, inactivity that was probably the reason why we enjoyed a boring start to the week.? The Rand however is worried that this situation could change at short notice as risk-off sentiment due to escalating tensions in the Middle East have the potential to benefit safe haven assets (the Dollar) while hurting risk assets like our currency.?
- The following is from CNBC:? The US Dollar stalled near a seven-week high on Monday as investors reassessed their positions after last week's strong US jobs data and as fears that Middle East tensions would spill into a wider conflict drove bids for safe havens. "As you look across some of the more risk-sensitive currencies in the G10 space, you do have the Dollar generally stronger, but a lot of the traditional safe havens -- Yen, Swiss and the Dollar -- are relative outperformers today," said Brian Daingerfield, foreign exchange strategist at NatWest Markets, New York. "That does reflect equities turning a little bit lower here and oil prices having edged up further as the markets are watching very closely developments in the Middle East."?
- Geopolitical concerns pose a threat to the Rand but we are also bracing for a stronger Dollar off the back of revised expectations around US monetary policy moves.? Things are changing quickly with the chances of a 50bps rate cut in November being removed completely while chances of the FED not cutting at all going from 3% yesterday morning to 15% today, and while 15% is still a small number the rate of change when it comes to this positioning has been swift.? Prospects of a smaller 25bps cut, or even no cut have sent the US 10 year Treasury above 4% for the first time since mid-August and the Dollar could be in for further strength if this narrative picks up momentum.?
- Incoming data will be key in driving market pricing and all eyes will be on Thursday’s US consumer inflation report to see just how close to the FED’s 2% target things have gotten.? However, the FED minutes released tomorrow could be equally important should they give any further detail around why they opted for an outsized 50bps cut in September along with potential clues around the FED’s next move.? It would appear that the Rand should abandon any hopes of another 50bps cut but we will definitely take any confirmation that a 25bps cut in November is a certainty.?
- The good news for the Rand is that the FED is not overly swayed but single data points, and they will probably not want to be seen as admitting fault by not cutting in November after delivering a supersized 50bps cut in their previous meeting.? The following is from Reuters: "The market very quickly flipped from talking about a 50 basis-point cut to possibly no cut in November, just based on the strength of the jobs data," said Gennadiy Goldberg, chief US rates strategist at TD Securities in New York. "It would be very strange for (the FED) to give up the ghost on additional cuts this soon after a 50bps rate cut."
- No local market data today.?
- Possible USD mid rate trading ranges in the Rand today are R17.35 and R17.65.
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