BOJ hikes rates, all eyes now on Fed
The Bank of Japan raised its overnight call rate to 0.25% as expected this morning. The BOJ further announced a halving of its bond-buying program to 3 trillion Yen while stating that further hikes were likely in the future. The Yen is currently trading a touch firmer at 152.68 against the Dollar. Market focus will now shift to the Fed FOMC later this afternoon with markets expecting this to be the Fed’s last hold in rates before the cutting cycle starts in September. Markets, which are pricing in 3 cuts this year, will also be monitoring the Fed’s “dot-plot” for any changes from the current one-cut forecast for 2024 by the Fed. The Dollar is holding steady against the Euro and Pound while easing slightly against EM currencies. The Rand is likely to continue to trade in an R18.20/R18.45 range ahead of the FOMC and is currently quoted at R18.30.
Geopolitical tensions lift both Gold and Oil
News that a senior Hamas leader has been killed in Iran and further drone strikes on Hezbollah by Israel have raised geopolitical tensions in the Middle East. Gold is trading stronger at $2,418 this morning, while both Platinum and Palladium are up on the day. Base metals have opened firmer in Asia despite another disappointing Chinese manufacturing PMI print. Brent crude closed softer at $78.63 last night but has rebounded to $79.85 this morning on the back of the Middle East tensions.
