Rand trades quietly ahead of Budget Speech and GDP Data Release

It was a quiet trading session internationally yesterday with Asian markets still suffering from liquidity constraints due to the Chinese New Year holidays and the markets waiting on key events in the week ahead.

The focus will now be on Fed chair Yellen’s testimony to the Senate and Congress today and tomorrow. Given the fresh uncertainty hanging over the possibility of a mid-2015 Fed rate hike, any hint of cautiousness surrounding the softening inflation trajectory and global demand weakness will be watched for. The US inflation perspective is critical to note, especially when US CPI for January is due to be released on Thursday. Consensus is expecting US headline CPI to fall into deflation on a y/y basis, which may well detract from the argument of the US being shielded from the global woes.

Eyes will also be on the Greek deal as EU finance ministers discuss the latest offer this morning.

Locally, it will be an important session of data today with the SARB’s leading indicator and Q4 GDP data due for release. Growth is the hot topic as the SARB and government maintain overly optimistic growth outlooks for 2015, which will be a key consideration for the Budget presentation tomorrow.

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