Rand Update
We do see riskier assets on the back foot today, with EM’s and stock markets falling further due to the pressure placed on the market by the hawkish Fed. The rand did trade at its highest point for the year, touching the R16.27 level briefly earlier today, and is currently down 1.4% for the day. The sustained strength we see in the dollar is still the key driver, with prolonged tensions in eastern Europe and a slowdown in the Chinese economy both adding fuel to the fire.
Commodity Update
As mentioned, the slowdown in the Chinese economy still plays its part in the markets, with the commodity sector affected the most. Gold is down 1.2% for the day and trades at $1,860 at the moment. Platinum is down 1.4%, while palladium is the only shining star in the metal sector. Palladium which was under immense pressure last week, is currently up 2% for the day but still well below levels we have seen over the past month. Oil futures are also being sold off today, with Brent Crude trading 3.5% lower on the day. The current levels of Copper are some of the best we have seen in a long while and could provide an opportunity for hedging in this market.
International Update
Dollar strength has been on the tip of everybody’s tongue as more and more interest hikes are being priced in. US Treasury yields are still trading at recent long-term highs, with the 10yr quoted at 3.10% while the 5yr reached 3%. The euro and pound are still treading water, with both majors down 0.25% for the day. Stock markets have taken a beating in today’s trading sessions, and since the open, we see all US indexes down. The Nasdaq is currently trading 2.9% softer while the S&P 500 is 2.2% in the red. We can expect most markets to play second fiddle to the dollar for now, with the market trend remaining long dollar.
