Subdued markets ahead of the US inflation data
Both currency and equity markets are holding in narrow ranges as traders await today’s US PPI and tomorrow’s CPI numbers with PPI expected to have moderated slightly while CPI is expected to be unchanged at 3.0% YoY.
The Dollar is marginally softer against the Euro and Pound but firmer against the Yen. Equity markets generally show small gains, and US futures are all green. The Nikkei is the exception, having jumped by over 3.0% this morning after Japan’s PPI number came in as expected and BOJ officials were less hawkish on interest rates.
The Rand failed to sustain a break below the R18.20 mark yesterday but ended the day firmer at R18.24. The local currency trades unchanged this morning in line with flat EM markets.
Gold eases back on some profit-taking
Caution in markets ahead of the US inflation data has seen Gold retreat from yesterday’s highs as traders took profit. Gold closed at $2,472 last night but has eased back to $2,460 this morning. The yellow metal should, however, remain on the front foot given the rate cut expectations in the US as well as the geopolitical tensions in the Middle East, with the US expecting an imminent attack on Israel by Iran.
Platinum and palladium both opened relatively flat, while base metals started trading softer this morning. Brent crude closed 3.4% firmer at $82.30 yesterday on the back of possible supply disruptions if the Iran/Israel situation worsens. The price has, however, slipped back to $81.65 this morning after OPEC+ lowered its 2024 demand outlook.