The latest US inflation data failed to significantly boost global stocks and bonds, as concerns over persistent price pressures raise doubts about the Federal Reserve’s rapid, deep rate cuts. While the data showed some softening in prices, the stickier aspects of inflation could keep the Fed cautious. Despite a recent drop in Treasury yields and a rebound in U.S. equities, the Fed’s future actions will likely be data-dependent, with a cautious approach to rate cuts. Upcoming economic reports and the Jackson Hole Symposium are key events to watch ahead of the Fed’s September meeting.
The Rand is trading at its best levels in a month. This is due to expected interest rate cuts in the US. We do think the Rand will struggle to break below the R18.00 level, so imports can use the levels to cover themselves a bit in the short term. We still expect the Rand to take its cues from international data and keep in the R18.00 to R18.50 range in the short term.