Daily Market Report 27 Sep
Further Chinese stimulus lifts risk sentiment ahead of PCE data
The PBoC cut its reserve cash requirements ratio for banks by 50bps in a further step to boost economic growth this morning. Risk sentiment is on the up with the Hang Seng and Shanghai indices jumping by 3.5% and 2.15%, respectively, while currencies like the Aussie and Kiwi continue to trade near multi-month highs. The Dollar is holding fairly steady near the week’s weakest levels against the Euro and Pound ahead of today’s PCE price index data. The Yen is trading softer at 146.04 as the ruling party’s leadership election is being led by a candidate who is opposed to further interest rate hikes. The Rand’s rollercoaster ride of the last two days continues with the local currency trading at R17.23 after having closed stronger at R17.15 last night. We expect some consolidation within the R17.10/R17.40 range for the Rand with the currency tracking international moves.
China’s stimulus fails to support Oil
The additional Chinese stimulus has failed to provide support for the price of oil, with Brent crude falling to $71.50 this morning. Increased supply from Libya and OPEC+ members paired with a subdued demand outlook continues to weigh on oil. Gold is trading steadily at just below yesterday’s new $2,685.42 record, while Platinum and Palladium prices have eased back a bit. Base metals have opened firmer this morning as China’s stimulus moves lift demand hopes.
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