Compiled by Dhivana Rajgopaul
JOHANNESBURG - The rand swung between gains and losses during the European session yesterday according to NKC Research.
With the Fed formally adopting a flexible average inflation targeting framework and signalling that low unemployment will not lead to tighter policy (if inflation stays close to target), we believe ample global dollar liquidity conditions will continue to support the rand, albeit with episodic surges in volatility brought about by external risk events (including the November elections in the US). We expect that US policymakers will likely keep rates near zero through mid-2024, and possibly longer, according to its updated reaction function.
However, it should be cautioned that monetary policy and especially QE have caused almost a complete decoupling between financial markets and their underlying real economies, making stock market indices and government bond interest rates – usually excellent gauges for underlying economic risk – heavily biased. At the close of local trade, the rand was quoted at R16.72/$.
South African bourse
The JSE All Share (+0.2 percent) ended slightly higher yesterday, with the local bourse surrendering the morning’s gains during the afternoon trading session. In local news, Ascendis Health announced expectations of headline losses per share of between R0.36 and R0.45, with group revenue coming in at between R6.9bn and R7.0bn.
Brent crude oil
The Brent oil price traded stronger during the early South African session yesterday before losing those gains during the afternoon session. Libya's National Oil Company announced that it expected oil production to rise to 260,000 bpd next week as it looks to revive the country’s oil industry. At the close of local trade, benchmark Brent crude futures quoted a slight 0.7 percent stronger at $41.62pb.