September 22 2009

Investors will focus on two key issues set to dominate local financial markets today, and that is the Reserve Bank's interest rate call and August's consumer inflation data. Analysts expect the CPI to ease slightly, but remain out of its target range of 3% to 6%. The consensus forecast for CPI is 6.4%.

Analysts expect the Reserve Bank to cut lending rates by a further 50 basis points to address the recent rand strength. The rand is a tad firmer at this hour. Analysts say the currency received support from the stronger Euro and recovery in precious metal prices.

On the capital market, the yield on the R153 government bond ended yesterday at 8.07%.

US and European markets

In New York, blue chips and the broader market fell yesterday as a drop in oil and other commodity prices hurt energy and materials stocks. But, the tech stocks rose, buoyed by a broker's upgrade in the biotechnology sector. The Dow Jones gave up 41 points to close at 9 779. The Nasdaq Composite climbed five points to 2 138. The S & P 500 dipped four points to 1 065.

Financial shares stumped Europe's major markets yesterday. London's FTSE 100 retreated 39 points to 5 134. In Paris, the CAC 40 shaved off 16 points to 3 812. Frankfurt's DAX ended 35 points lower at 5 669.

Asian markets

Markets in the Asia-Pacific region are mixed this morning. In Hong Kong, the Hang Seng gained 117 points to 21 589. Sydney's ASX lost eight points to 4 670. Markets in Tokyo are closed for a long weekend.

Platinum is trading at $1319.50/oz and the spot price of Brent crude oil has dipped to $68.51 a barrel.