JOHANNESBURG - The South African rand oscillated in anticipation of the US FOMC meeting, which was widely anticipated to result in a rate cut, while on the local front traders awaited today’s repo rate decision against a backdrop of a weakening fiscal position, downside risk to merchandise trade and volatile geopolitical and global trade outlook according to NKC Research.
Our forecast concurs with the consensus for a Sarb decision to maintain the repo rate at 6.5 percent. On the local data front, the August inflation release outpaced expectations, further cementing expectations for a hold, although it remains comfortably at the lower end of the target range of between 3 percent and 6 percent. At the close of local trade, the rand quoted 0.3 percent stronger at R14.64/$, after trading in range of R14.61/$ - R14.70/$. The rand traded weaker overnight after the Fed cut US interest rates by 25 bps. Expected range today R14.60/$ - R14.90/$.
South African bourse
The JSE All Share (-1.19 percent) ended lower yesterday, dragged by large technology (-3.25 percent) and consumer (-3.81 percent) shares. In the overall emerging market sphere, the MSCI Emerging Market Index (+0.24 percent) traded higher.
Brent crude oil
The Brent oil price drifted lower yesterday, amid cautious trading, after Energy Information Administration data indicated that US crude inventories rose by 1.1 million barrels last week, beating analysts’ expectations. At the close of local trade, benchmark Brent crude futures quoted 0.66 percent lower at $64.25pb. Crude prices traded little changed during Asian trade this morning.