Monetary Policy Committee Meeting gets under way today
The outcome of which will be released on Thursday, Economists are not expecting any change, as the market will most likely be focussing on the view of the Governor going forward. Locally‚ banks have said the MPC (monetary policy committee) three-day meeting would be analysed in the context of a deterioration in the economies not only of developed countries‚ but also of emerging countries.
Germany votes on the bailout package to Spain. The market is waiting to find out who will guarantee the new bonds – Spain or ECB / some centralised body. We have seen almost the same amount of foreign money flows into our local bonds for the year to date versus the whole of last year.
ZAR was steady in afternoon trade and‚ with no major news coming through‚ the local currency continued to be in ranges ahead of the US Federal Reserve’s Ben Bernanke’s speech on Tuesday and the monetary policy committee meeting interest rate decision on Thursday.
4 influences on market volatility:
- China growth down for the sixth consecutive month
- Global growth and interest rates down
- Move into emerging market bonds – better yields
- Euro still reacting to headlines and risk around Spain and Italy
The market will be very nervous on the expectations of the Fed Chairman’s meeting and the MPC rate decision.
Trading range for ZAR 8.1500/8.2500 for the next few days.