Rand trading around mid-R15.20's as we wait in anticipation of tonight's FOMC outcome

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Investors expect the Federal Reserve to signal that it plans to raise rates in March, tightening monetary policy for the first time since it slashed borrowing costs to near-zero soon after the onset of the coronavirus pandemic nearly two years ago.

Rand update

In the meantime, this morning the rand is trading around the mid-R15.20’s and still within its wider R15.10-15.40 band Improved risk sentiment has been visible in the Asian markets, with both the Shanghai Composite and Hang Seng trading stronger.

Commodity update

Commodity prices are relatively unchanged from last night, with Gold trading at $1,847, Platinum at $1,025, and Palladium just above the $2,180 mark. Geopolitical tension between Ukraine and Russia is creating concerns over the supply of energy sources in Europe and is keeping oil prices at elevated levels.

Another metal to watch because of the sanctions is Aluminium, as there can be possible supply disruptions, and we have already seen the price creeping higher, currently above $3,000 per tonne. Brent Crude rose to $88,20 overnight but has since dropped slightly while WTI is at $85.50.

International update

The dollar is slightly softer this morning, trading at 1.13 against the euro. Overnight the 10yr-yield closed on 1.773%, while the 2yr treasury yield rose above the 1% barrier and closed on 1.031%. On the opposite end of the asset class spectrum, the Nasdaq lost 2.2% and the S&P 500 1.2%. The VIX rose 4.21%, and we could continue to see volatility heading into tonight.