Markets have been a bit choppy in today’s trading session as we draw closer to the FOMC rate announcement tomorrow evening. During the course of the day, we saw the rand trading stronger as the dollar softened across the board, but better-than-expected PMI data quickly reversed those gains. October PMI data showed a more robust manufacturing index than what was expected by markets, coming in at 50.4 versus the 49.9 expectation. At a stage, the dollar traded at R18.07 against the rand, while the pound and euro were seen quoted at 0.9950 and 1.1566, respectively. Since the PMI figure, we have seen the rand trade back up to the R18.25 mark, while the pound and euro are currently hovering around this session’s lows.
After weak Chinese data and another Covid story, the commodity sector came under pressure on Monday, but we have seen a reversal of fortunes today. Gold is currently trading up 0.8% for the day, platinum up 1.6%, and palladium up nearly 3%. All three metals are still quite some way off recent highs but did show some resilience in today’s session. Copper has been in the same boat today, currently trading at $7,701 after opening much weaker around the $7,620 mark.
Eastern equities closed the day on a positive note, with the Hang Seng Tech sector up 7.8% after unconfirmed reports of reopening talks taking place in China. The Shanghai Composite also closed higher, but since the US markets opened, we have seen equities under pressure and short-dated bond yields rising. If the risk-off sentiment continues, we can expect a spillover to happen in the Asia trading session tomorrow morning and find the rand to be under some pressure.
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