A sense of calmness after the storm

Markets have reacted positively after what people describe as a dovish hike by the FOMC last night, and we have seen the Volatility Index drop nearly 7% on the day. Equity markets and EM’s are finding life easier since, and we saw the rand test below R18.10 earlier today. This level has proven difficult for the rand to sustain a break below at the past two attempts and seems to be the same this time around. Local concerns are still priced into the rand as a risk premium and could provide headwinds for the rand on a sustainable stint stronger.

The dollar has clawed back some of the losses against other majors, but the fact that markets are now anticipating the FOMC to pivot sooner rather than later has brought the dollar to its knees for the time being. The commodity sector has been trading in a positive sense today, with metals across the board ending the day on the front foot, while Brent Crude has stabilized around the $76 mark.

#Markets #FOMC #Equity