RAND STEADY, JSE INCHES UP

THE RAND steadied yesterday as the prospect of rolling blackouts and downbeat economic data offset expectations that a dovish tone at this week’s US Federal Reserve policy meeting could lift emerging market assets.

At 5pm, the rand bid at R14.4420 to the dollar, about 0.02 percent weaker than its New York close on Monday.

The Fed’s two-day meeting started last night. Money markets were pricing in a 99 percent probability of US borrowing costs not being altered today.

“A dovish Fed will trigger a risk-on rally for risk assets. But the rand’s gains will be curbed by rolling blackouts and sales data that is likely to disappoint,” RMB analyst Mpho Tsebe said in a note.

Caution prevailed among investors as power utility Eskom said it would continue implementing power cuts on a rotational basis as it struggles with generating capacity shortages.

Analysts say power cuts, which have happened in several rounds since June last year, are one of the reasons why business confidence has slumped in recent months.

In fixed income, the yield on the benchmark government bond due in 2026 rose to 8.76 percent.

Stocks meanwhile rose, with the all share index up 0.14 percent to 56 849.67 points, while the Top40 index firmed 0.17 percent to 50 475.11 points.

Gold also joined other precious metals to benefit from a weaker dollar going into the Fed meeting. I Reuters