The Rand hit an 11 month low of 15.4650 yesterday as geopolitical tensions, global growth concerns and local political and economic headwinds hammered the currency. The Rand was by far the worst performing EM currency again, that was until the Argentinian markets opened and we saw a massive sell off of Argentinian assets and the Peso. Political shocks saw the stock market down 35% and the currency drop 25% bringing the possibility if a debt default in Argentinia into focus. There does not appear to be much contagion impact on other EM currencies and the Rand has recovered to be trading at 15.2700 this morning. The Euro and Pound are steady this morning at 1.1193 and 1.2072 respectively as markets look for fresh direction.
Wall Street closed in negative territory with the S&P down 1.22%, the Dow down 1.48% and the Nasdaq down 1.20%. Markets in the Far East are also down as protests in Hong Kong escalate and risk aversion returns to equity markets. The US Treasury yields slipped again yesterday with the 10y yield down at 1.65% and the 30y at 2.14% as analysts forecast the 10y yield at 1.25% by year end.
Gold continues to soar and the price hit a 6 year high of $1 518.03 in Asia this morning and is currently quoted at $1 516.33.
Look out for US CPI data out later today.