Risk aversion is still in focus

The Rand and other EM’s are still under pressure as there is still some wash-through of risk aversion with recession fears still abound. The recession fears will only grow stronger with each Fed meeting where a hawkish tone is struck, and more rate hikes are in the offing. We did see the Rand break above the R17.00 level against the US dollar in afternoon trade and is currently hovering around the R 17.05 level. The market should receive fresh impetus on Friday with the US non-farm payroll numbers.

European inflation still rising

The calls for massive hikes from the ECB will only echo louder with Eurozone inflation printing at 9.1% vs. the 9.0% expected. Inflation is expected to stay rife in the Eurozone, with the energy crisis currently being experienced there and will start to impact other economic figures. This could place renewed pressure on the Euro and markedly change the Euro’s outlook going forward.

#Inflation #Recession #ECB #Eurozone