The rand strengthened for the fourth straight day on Monday, reaching an intraday high of R17.62/$, as investors anticipated key central bank meetings this week including that of the US Federal Reserve (Fed) and the South African Reserve Bank’s Monetary Policy Committee (MPC). The MPC is expected to lower interest rates by 25 basis points to 8% on Thursday, with another similar cut anticipated in November. The last adjustment occurred in May 2023 when the MPC raised the rate by 50 basis points to 8.25%. The FTSE/JSE All Share Index (ALSI) marginally rose by 0.04% for the day.
US stock markets were mixed on Monday, with the S&P 500 fluctuating near break-even, the Dow Jones climbing over 210 points to a new all-time high, and the Nasdaq falling by 0.70%. Traders remained cautious ahead of the Fed’s monetary policy announcement on Wednesday. The Fed is widely expected to lower rates by 50 basis points. Major decisions are also expected from the Bank of England, the Bank of Japan, and Norway’s central bank.
The Hang Seng index rose by 0.30% on Monday, marking a third consecutive gain as traders grew confident that the US monetary policy easing cycle would begin later this week. In China, the People’s Bank of China (PBoC) is expected to announce its September key lending rates on Friday after underwhelming industrial output and retail trade data in August. Meanwhile, Japanese markets were closed on Monday for a public holiday.
In Europe, stocks declined, with the STOXX 50 down by 0.40% and the STOXX 600 down by 0.20%, as investors awaited key interest rate decisions.
In commodities, WTI crude oil futures rose above $70 per barrel on Monday, extending a 1.40% gain from the previous week, driven by ongoing disruptions to US Gulf oil infrastructure and expectations of a US interest rate cut.
