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Oil prices rose around 1 percent on Thursday, extending gains from the previous session after a surprise third consecutive weekly U.S. crude inventory draw tightened the market.
South Africa’s rand firmed to its highest in four weeks against the dollar on Wednesday, helped by strong appetite for high yielding emerging market assets as investors anticipate low U.S. interest rates low for longer this year. South Africa’s headline consumer inflation dipped below the top end of the central bank’s target in August to its lowest in nine months, data showed on Wednesday, suggesting interest rates would remain unchanged at today’s monetary policy meeting.
Nigeria; Interest rate cuts alone will not help to pull Nigeria out of a recession amidst rising inflation, the country’s central bank said on Wednesday.
I TOLD YOU SO!!! Yes I was right. The FED held FED rates steady at 0.50% at their meeting last night. Just like I have been saying for a couple of weeks (while a number of VERY well-known financial institutions were calling for a 0.25% hike). Simple, stick with ParityFX J
While agreeing that the case for a rate rise had strengthened, Yellen argued that it made sense to put off a move for now amid signs that disillusioned Americans who dropped out of the labour market are returning and looking for work. “The economy has a little more room to run than might have been previously thought. That’s good news.” Additionally the FED was accused by presidential nominee Donald Trump that Yellen is deliberately keeping rates low to help make President Barack Obama look good in his final year in office. When asked about such accusations, Yellen repeatedly disputed that political considerations played any role in Fed decisions. “We do not discuss politics at our meetings and we do not take politics into account in our decisions,” she said. I can tell you one thing for certain, whatever Mr Trump says simply divide by infinity and then multiply by 0. Hot air and some TV air time. The FED is 100% independent and makes their decisions based on the state of the US economy and not to satisfy a political party.
Ms Yellen also made clear that the FED still intends to raise rates this year. “I would expect to see that, if we continue on the current course of labour market improvement and there are no major new risks that develop,” she said. Now this is where it gets interesting…the FED also scaled back the number of hikes it expects next year, from 3 to 2. Regarding this year then there are 2 remaining meetings, November and December. I think given the former is right by the US elections they would prefer to hold back and do nothing. So that leaves December where I THINK if things continue as they are and the economy regularises (and inflation picks up towards 2%) the FED will surprise the market and hike 0.50% – that will kill 2 birds with one stone and their job will be done for 2016 – 1% hallelujah.
Now some BREXIT news and I quote directly from an article by Bloomberg which says it all, “Global investment banks are throwing in the towel in the battle to keep London the home for clearing of $570 billion of euro derivatives. Executives tell Bloomberg’s they expect France or Germany to prevail in the tussle once Brexit is underway and are making plans to cope. While it might take years for the transitions to happen, jobs and operations central to the clearing function will be among the first moved to the continent once the U.K. triggers its withdrawal from the European Union, one person said. It would mark a defeat for Chancellor of the Exchequer Philip Hammond, who pledged this month to seek to protect London’s status as the epicentre for European trading in interest-rate swaps, accounting for about 39 percent of the global market. European Commission Vice President Valdis Dombrovskis, the bloc’s financial-services chief, today reiterated that the U.K. faces a choice between imposing immigration controls and letting its financial firms continue to trade freely with the EU.” I have said this all along. The economic numbers you are seeing today have absolutely NO REFLECTION of what’s going to be like once we invoke the Article. That’s when the proverbial cat’s hairs hits the fan. I am just waiting for the day that happens and the EU tell the UK to take a hike. PM May as much as I admire her and her comments that the EU will HAVE to agree to terms of trade with the UK….I think she is dreaming. Prepare for a terrible and tough generation. You have been warned. Pity you voted Leave!!
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