JOHANNESBURG - The rand retreated somewhat during the early European session but held out against the greenback, as markets eyed the Fed decision on Wednesday for directional guidance on the pace of policy easing according to NKC Research.
The local unit retreated from a two-week high against the greenback on Tuesday, as government signals of support for struggling parastatal Eskom were well-received. Meanwhile, the inflation print came out at a muted 4.5 percent y-o-y, which plays into our view that the MPC will opt to cut rates by 25 bps at the July convention, conceding risks of a larger cut (50 bps). At the close of local trade, the rand quoted 0.2 percent stronger at R14.52/$, after trading in range of R14.47/$ - R14.58/$. The rand traded firmer overnight, after the USD slipped following Dovish Fed comments. Expected range today R14.10/$ - R14.45/$.
South African bourse
The JSE All Share (-0.1 percent) ended lower yesterday, dragged mostly by losses in the household goods and home construction sector (-8.7 percent). In the overall emerging market sphere, the MSCI Emerging Market Index (+1.4 percent) traded higher. In local news, Steinhoff (-8.7 percent) shares languished in the red yesterday after the scandal-ridden retailer reported an annual loss of €1.2bn for 2018.
Brent crude oil
The Brent oil price traded little changed yesterday, as smaller-than-expected declines in US crude inventories outweighed optimism over a potential Sino-US trade deal. At the close of local trade, benchmark Brent crude futures quoted 0.1 percent higher at $62.30pb. Crude prices strengthened during Asian trade this morning.
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