KEY THEMES
Globally, the US dollar is near a one-month low and broadly far from the levels last seen in the summer of 2020. The current debate of when exactly the Fed is going to taper is hindering the greenback path, especially after one of the softest jobs reports in many months since the pandemic. While the current bullish run in commodity prices is more of a supply issue, if the Fed’s tapering coincided with supply recovery, a stronger US dollar will then help put a lid on the robust price rally in global commodity markets.
Locally, after okay gains by the EGX 30 during August (+3.7%), the index has wiped out all of September’s gains so far in yesterday’s session. We note that since 2005 the EGX 30 has had a total of 16 months of September (not counting September 2021 yet). During such period, the index’s monthly close in September came 37.5% of the time (i.e. 6 times) in the negative territory (averaging -7.8%) and 62.5% of the time (i.e. 10 times) in the green (averaging +5.8%). Overall, the index’s monthly return in September during such period averaged +0.7%. So historically, it appears that despite September being more on the green side, its bearish side is pretty wild as well.