As 2024 winds down, ETM Analytics and TreasuryONE deliver the year’s final Weekly Market Review. With important economic data still on the horizon, TreasuryONE’s currency strategist Andre Cilliers delves into the implications of key developments:
US CPI Data (Wednesday):
A slight uptick in inflation is expected, which could influence the Federal Reserve’s December meeting and the likelihood of a 25-basis-point rate cut. Markets are eager to see how this aligns with Fed Chair Jerome Powell’s concerns over the U.S. budget deficit and resilient labour market.
Interest Rate Trends:
While global central banks, including China and Europe, lean toward looser monetary policies to stimulate growth, South Africa’s Reserve Bank remains cautious. Governor Lesetja Kganyago’s focus on combating inflation has seen incremental rate cuts, though analysts argue for bolder moves to relieve consumer pressure amid a cost-of-living crisis.
Rand Outlook:
The South African Rand remains comfortably within its trading band of R17.30–R18.30, with minimal expected volatility through the festive season. However, shifts in Chinese monetary policy and Trump’s inauguration in January 2025 could bring renewed market activity in the new year.
As we close 2024, the stage is set for a dynamic 2025, with geopolitical tensions, economic shifts, and market movements promising an interesting year ahead.
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