Rate-cut bets continue to rise despite upbeat retail sales data
Market expectations of a September rate cut by the Fed and possibly two further rate cuts this year continue to increase despite an above-estimate US retail sales number yesterday. Speculation of a Donald Trump presidency, which had boosted the Dollar, has largely been offset by the rate-cut bets, and we have the Dollar trading a touch softer this morning.
The Euro is back above the 1.0900 mark, while the Pound and Yen are firmer at 1.2970 and 158.22, respectively. US Treasury yields are down a touch, with the 10-year yield at 4.17%.
We have the UK and EU CPI numbers today, while the ECB MPC interest rate decision is tomorrow. The Rand clawed back a large part of its recent losses yesterday, closing at R18.08 and opening even firmer at R18.06 this morning.
Good offshore demand for local assets, profit-taking, and export-related inflows are some factors behind the local currency’s recovery.
Gold hits a fresh record high of $2,482.29 in Asia this morning
Yesterday’s strong rally in gold continued this morning, with the price touching a new record high of $2,482.29 earlier this morning. The yellow metal is buoyed by rate-cut optimism in markets. Platinum is trading above the $1,000 mark, while Palladium is nearly 1.0% firmer at $968.
Concerns over the slow economic recovery in China continue to weigh on the oil price, with Brent crude falling to $83.60 in the Far East this morning.