The South African Reserve Bank surprised the markets yesterday with a 100bp repo rate cut to 5.25% from 6.25%. Analysts had forecast 50bp but the SARB appears to be front-loading their easing due to the impact of the Covid-19 pandemic on the economy and a lower inflation outlook. The Rand initially rallied as the move was seen as positive, but later in New York, it succumbed the strong Dollar and closed weaker at 17.4525 in line with most other currencies. The Rand is a touch firmer this morning at 17.3775 as Asian markets are positive and the Russian Ruble and Mexican Peso recover on a spike in the Oil price.
The Euro and Pound traded down at 1.0650 and 1.1414 earlier today, but have recovered to 1.0750 and 1.1650 respectively. The BOE yesterday cut interest rates to 0.1% from 0.25% and announced an additional 200 billion Pounds of bond purchases.
Wall Street closed moderately up yesterday while Asian stocks, barring the Nikkei, are also positive today. The JSE All Share was down 1.33% yesterday.
The Oil price has spiked overnight and this morning, Brent is currently trading at $29.00 after Trump said he was prepared to intervene in the Saudi/Russia disagreement. Gold is firmer this morning at $1 487.50 after having closed at $1 460.00 last night.