Weaker US Data, softer dollar
Softer US data has seen the dollar trading on the back foot this afternoon, with markets favoring riskier assets. US PPI printed at 6.2% y-o-y, versus the 6.8% expectation, while retail sales declined 1.1% in December against the 0.8% decline which was expected. We have seen the dollar trade softer against its major peers, with the euro and pound currently trading at 1.0880 and 1.2430, respectively. Treasury Yields in the US have fallen after the PPI release, with the 10yr yield dropping to its lowest point since September, as the data confirms that inflation could be starting to ease.
Rand Update
The rand gained nearly 1% on the day, mostly due to the lower PPI number, and traded below R16.90 earlier. Local CPI printed in line with expectations but eased for a third consecutive month. The volatility has increased in the rand yet again, and with softer US data leading to a softer dollar, we could see the rand track closer to the multiple-month low of R16.70 seen last week.
Commodities on the rise
Copper prices continue to rally as expected demand outweighs recession fears. The price of copper is currently up 2.2% for the day and currently trading at $9,525. Gold gained 0.8% on the day after producer price inflation numbers spurred a softer dollar. Brent Crude is up 1.8% for the day, with optimism over global demand leading to an increase in energy prices.
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