| USD = R18.55 | AUD = R12.42 |
| GBP = R22.70 | DXY = 103.19 |
| EUR = R19.98 | Brent Crude = $75.06 per barrel |
The national shutdown is behind us, the global banking crisis appears to be under control and so all the Rand needs to do now is get past tonight’s FED decision. Chinese President
Already facing uncharted territory, the Federal Open Market Committee’s job is only getting tougher. It faces innumerable conundrums: assessing the economic outlook and how recent financial turmoil impacts that, the rate decision, financial stability considerations and communicating decisions. there has been a notable improvement in risk appetite evident by a big decline in the VIX (fear) index, alongside gains in equities and a flurry of HG bond issuance. Markets are seemingly becoming more comfortable with the idea that authorities have probably done enough to prevent a systemic banking crisis. The improvement in risk appetite has also triggered a repricing of Fed and ECB rate hike expectations fuelling an aggressive bear flattening of the UST and Bund curves.
A gloomy assessment of Ukraine’s prospects for victory against Russia emerged from a recent private gathering of former top US soldiers, intelligence officials and scholars with resumes reaching from the Reagan to the Trump administrations. The several dozen attendees, many of whom had held cabinet or sub-cabinet positions, met under Chatham House rules, which forbid identification of individual participants but allow the content itself to be presented. Short of trained personnel and ammunition, one speaker argued, Ukraine’s President Volodymyr Zelensky might consider a Chinese peace plan, especially after Beijing’s successful mediation of the Iran-Saudi dispute. Although Washington has dismissed China’s peace plan for Ukraine, Zelensky has not. Russia would keep the Sea of Azov and most of the Donbas, a settlement that might be forced on Ukraine as it runs out of manpower and ammunition.
Canada’s inflation rate cooled to 5.2 per cent in February, the largest deceleration since April 2020, according to Statistics Canada. The agency said its consumer price index had a year-over-year deceleration from February 2022, when the inflation rate was 5.7 per cent. The reading compared with an annual inflation rate of 5.9 per cent in January and was the lowest reading since January 2022, when it was 5.1 per cent. Statistics Canada noted that the decline was due to a steep monthly increase in prices in February 2022, when the global economy was significantly affected by the Russian invasion of Ukraine.
Local and UK CPI data will be released today. Local CPI is expected to have moderated to 6.8% y/y, from 6.9% y/y in January. The UK CPI for February, scheduled for release today, likely moderated to 9.9% y/y, from 10.1% y/y in January.