The Dollar surged yesterday on investors piling into the greenback as more European countries shut down and fear over a shortage of Dollars. The Dollar touched 1.0950 best levels against the Euro and 1.2000 levels against the Pound yesterday but is trading softer at 1.1035 and 1.2110 this morning.
The Rand traded in its narrowest range in over a week yesterday as it showed some resilience against the strong Dollar. The local currency is steady this morning at 16.6125 ahead of the SARB’s 2-day MPC meeting which starts today. Economists are forecasting a 50 basis point rate cut by the central bank. Turkey cut its rates by 1.0% yesterday. The Aussie Dollar fell below 0.6000 against the Dollar for the first time since 2003.
Wall Street rebounded quite sharply as the Trump administration attempts to push through a $1 trillion stimulus package for business and households. The Dow closed 5.20% up, the S&P up 6.00% and the Nasdaq up 6.23% a day after their biggest losses since 1987. Asian stocks are all trading in positive territory but US futures continue their volatile ride and are currently down. The JSE ALSI closed up 2.01% but remains heavily down from its highs. (See the graph)
The VIX Volatility index yesterday hit an all-time high of 84.83 and currently sits at 75.91. Chinese Q1 is forecast to contract by 11% due to the impact of Covid-19. US Treasury yields are higher on the stimulus hopes and we have the 10y at 0.995% and the 30y at 1.622%.
Gold is firmer this morning at $1 524.80 while Oil is now below $29.00 at $28.85. Platinum is up at $674.00 and Palladium flat at $1 668.00.