Investors are ditching the greenback: The USD fell to three-month lows yesterday, putting it on track for its worst monthly performance in a year, after Federal Reserve Governor Christopher Waller hinted at the possibility of rate cuts in the coming months, the Financial Times wrote. The USD index — which tracks the greenback against a basket of currencies — dipped to its lowest since mid-August yesterday, and has lost 3.6% this month in a sign that financial conditions are easing.

What he said: “I am increasingly confident that policy is currently well positioned to slow the economy and get inflation back to 2%, Waller — a hawkish member of the Fed board — said yesterday. If inflation continues to decline for “several more months … we could start lowering the policy rate.”

US treasuries gained ground: Yields on US government debt fell to two-month lows following Waller’s comments. The rate on the 10-year bond slipped further to 4.35%, and has now fallen from above 5% in just five weeks.

A cause for celebration in our neck of the woods: A weakening greenback is good news for countries with USD-denominated debts or for those heavily dependent on imports, like Egypt. A weaker USD makes it cheaper to service USD debt and to pay for imports.

Rain on our parade: Another Fed governor, Michelle Bowman, still believes that further hikes may be in the cards to bring inflation down “in a timely way.” She warned against “prematurely declaring victory in the fight against inflation.”

ALSO WORTH NOTING-

  • Gulf states look ‘very, very attractive’ to Ray Dalio: Bn’aire hedge fund investor Ray Dalio, founder of the world’s largest hedge fund Bridgewater Associates and recent subject of a negative take in a high-profile biography that suggests his secret sauce wasn’t a method, but his whim, emphasized the GCC’s fast-emerging appeal to global investors amid a changing world order. (CNBC)

EGX30

25,122

-3.0% (YTD: +72.1%)

USD (CBE)

Buy 30.83

Sell 30.96

USD at CIB

Buy 30.85

Sell 30.95

Interest rates CBE

19.25% deposit

20.25% lending

Tadawul

11,101

+0.2% (YTD: +5.9%)

ADX

9,541

+0.3% (YTD: -6.6%)

DFM

4,009

+0.4% (YTD: +20.2%)

S&P 500

4,555

+0.1% (YTD: +18.6%)

FTSE 100

7,455

-0.1% (YTD: +0.1%)

Euro Stoxx 50

4,348

-0.2% (YTD: +14.6%)

Brent crude

USD 81.66

+2.1%

Natural gas (Nymex)

USD 2.71

-3.2%

Gold

USD 2,060

+1.3%

BTC

USD 37,979

+2.5% (YTD: +131.2%)

THE CLOSING BELL-

The EGX30 fell 3.0% at yesterday’s close on turnover of EGP 5.2 bn (81.7% above the 90-day average). Regional investors were net buyers. The index is up 72.1% YTD.

In the green: Orascom Construction (+3.1%), Edita (+0.9%) and Palm Hills Development (+0.3%).

In the red: Credit Agricole (-5.8%), CIB (-4.8%) and Eastern Company (-4.4%).

It is looking like another mixed session for Asian markets in early trading this morning with indices split between gains and losses. Futures suggest a mixed open in Europe later this morning, while major US benchmarks are likely to rise at the opening bell.

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