Rand update
Not much has changed overnight, with the rand and other EM’s still trading sideways ahead of today’s US CPI print which is expected to read 8.1% YoY. We open this morning with our local currency trading at R16.08 against the dollar, R16.95 against the euro, and R19.83 against the pound. Earlier this morning, we saw that China’s inflation surged by 2.1% during April as higher energy costs and a pick-up in demand for fresh produce led to rising food prices. Equity markets in the east have all closed higher this morning, with the Shanghai Composite and Hang Seng closing around 1.7% higher.
Commodity update
A rampant dollar and higher US Treasury yields are still impacting gold’s price, and we see the yellow metal trading at $1,838 this morning. Platinum is quoted at $977, while palladium is still flat from yesterday and hovering around $2,070. Base metals are still under pressure, with lower demand from China keeping the prices under pressure. A recovery in demand could be on the cards, with Shanghai reporting a 51% drop in its infection rate. Copper has bounced from the lows we saw yesterday to currently trading at $9,344.
Oil prices are up this morning, with OPEC+ agreeing to another modest increase in production but warns that the globe is short on oil producing capacity. This, coupled with the anticipation of an increase in demand for fuel in China in the coming weeks, has led to Brent Crude rising 2.35% already this morning, up from $101.30 earlier on.
International update
The dollar is still up this morning, quoted at 1.0545 against the euro and 1.2335 against the pound. We could see the dollar trading range-bound with a slightly stronger bias ahead of the CPI print around 14:30 this afternoon. US treasury yields at 2.98% for the 10yr, 2.91% for the 5yr, and 2.62% for the 2yr. The Nasdaq has gained back some of the losses over the past few days closing just under 1% higher earlier this morning. This follows the aggressive sell-off in tech stocks we have seen since Friday.
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