The JSE all-share index closing the day at 68 587 from its opening price of 67 782.
On Wednesday the South African equity markets saw NVest Financial Holdings Ltd. (NVE) being the biggest loser of the day with a -20.73%loss moving from R2.46 to close the day at R1.95, whilst Orion Minerals Ltd. (ORN) saw a 18.75% gain moving from R0.32 to R0.38, making it the biggest winner in the equity market.
The Rand regained some ground against the US Dollar on Wednesday, moving from R15.44 to R15.25
Gold moved from 1 787.76 USD/oz to close on 1 769.84 USD/oz.
Platinum closed Wednesday at 1 032.53 USD/oz from its opening price of 1 041.26 USD/oz
Copper closed on 9 648.50 USD/t from its opening price of 9 770.50 USD/t
Brent Crude took a knock ahead of the OPEC Meeting, moving from 84.72 USD to close on 81.99 USD
A FOMC announced $15 bln QE tapering o begin in Nov, as expected! Chair Powell ended up taking a very neutral stance with respect to the next step in the FOMC’s policy moves, neither validating nor pushing back against expectations for a June tightening with 2 quarter point tightening on 2022.
US Yields were measurably higher on the day but ended cheaper, as even a baby step toward normalization via the start of tapering brings the day of tightening that much closer. (10-yearat 1.60% and 30-year at 2.02%, while the 2-year cheapened 1.6 bps to 0.466%).
Global stocks higher & Bonds firm as markets seem to have taken the Fed’s tapering schedule quite well and indeed as a sign that the recovery remains on track. Topix and JPN225 are up 1.2% and 0.9% respectively. The USA100 led the way with a 1.0% gain, with the USA50065% firmer, and the USA30 up 0.29% (record highs again).
Data included better than expected results with a new historic peak on the ISM services index and near record high prices, a solid ADP print, and an uptick in factory orders.
ECB’s Lagarde continued to try to tamp down rate hike speculation as she stressed that an undue tightening of financing conditions is not desirable.
USOil dropped back to $78.50 amid speculation that with Iran nuclear talks resuming the country could start boosting supply, although that remains a dubious assumption.
BoE Preview: The BoE has flagged that this month’s MPC meeting will be a “live” one, with chief economist Pill suggesting that the decision on rates will be “finely balanced”. Inflation is expected to pick up further in the coming months, before dropping back next year, but central bankers seem increasingly convinced that structural labour market shortages will push up wage growth further with the end of the furlough scheme apparently not really denting momentum. Not everyone is convinced though as dovish comments from MPC member Tenreyro highlighted. A tight decision then today, and likely a split one, which is also reflected in expectations, with Bloomberg consensus predicting unchanged rates, while money markets have fully priced in a move and more to come for 2022. However, market pricing also suggests that investors actually see the expected early lift-off as a mistake that the BoE will have to reverse in 2023. For bond markets it may ultimately not matter much if a move comes in November or December, but the updated projections on the growth and inflation outlook will be decisive for the question of how fast and how far the BoE expects to take rates over the next year.
– Hotforex Market Analyst, Andria Pichidi.
Things to watch today
Australia Retail Sales MoM, Germany Factory Orders MoM, South Africa Standard Bank Purchasing Managers Index (PMI), OPEC Meeting, U.K. Construction Purchasing Managers Index (PMI), Bank of England Inflation Report, U.K. Interest Rate Decision, Bank of England (BoE) Monetary Policy Committee (MPC) Meeting Minutes, South Africa Budget Balance, European Central Bank President Lagarde Speaks.
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