"Historically, the volatility in an election year tends to spike in October. We haven't seen a spike, but it's very normal for markets to get more jittery into the election." Keith Lerner, co-chief investment officer at Truist Advisory Services in Atlanta, reminding us that October in a US election year usually sees a selloff in equities, and while markets are still close to record highs we still have four days of the month to navigate.?
These are the mid rates at 5:40 today:
Brent Crude = $72.72 per barrel
- There were very few new developments for the currency market to focus on last week but the week ahead is quite the opposite which could make things interesting for the Rand.? We kick things off today at R17.72 to the Dollar and unfortunately it’s not looking likely that we’ll be able to finish October stronger than the R17.29 where we started off at four weeks ago.?
- The week ahead is a busty one but the Rand will have to wait one more day for the action to start as we have no data releases locally or from the US today.? We do however have the Japanese election results from yesterday’s vote and it appears that last week’s concerns are coming to bear, this as the LDP coalition looks to have lost control after ruling Japan for an extended period of time.? Uncertainty around their new government means uncertainty is pulling through into the timing of their next interest rate hike and this has sent the Yen to a three month low against the Dollar while pushing the Dollar Index higher.? ?
- The Dollar is also finding support from yet another round of positive US data releases last Friday.? Capital goods orders increased more than expected, consumer sentiment ticked higher and a survey on one-year inflation predictions came in lower than prior surveys, all of which point to the FED not needing to rush their upcoming interest rate cuts.? After taking a breather towards the end of last week the Dollar Index has jumped from 103.94 to 104.54 and the Rand looks set to start the week on the back foot.?
- On the local front all eyes will be on Finance Minister Enoch Godongwana as he delivers our medium term budget speech (MTBS) on Wednesday.? Hopefully the absence of load shedding along with early GNU progress will allow him to present an upbeat outlook for the country, although as usual he will have to manage a very tricky balancing act when it comes to reigning in expenditure.? Interestingly, there is some chatter out there that the MTBS might be used to announce a revision to the SARB’s inflation target which currently sits at 3% to 6%, with Nedbank economists suggesting that the mid-point could be lowered from 4.5% to 3%.?
- From the US there is plenty to move the market this week including their Q3 GDP report on Wednesday, the PCE inflation report on Thursday and the all important monthly jobs report on Friday.? The jobs report has become the FED’s most watched metric as they are now focused on the health of the US labour market, although the October report will have to be taken with a big pinch of salt given there were two major hurricanes which would have disrupted hiring figures.?
- No local market data today.?
- Possible USD mid rate trading ranges in the Rand today are R17.60 and R17.90.
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4 个月With uncertainties looming, staying rational and diversified is key.