02 October 2023
Support & Resistance Levels
Data This Week
ZAR weakness returns in early Monday trading.
Today’s Market & Resistance Levels
Data This Week
17h00 FED CHAIR POWELL SPEAKS
14H30 US NON FARM PAYROLLS +163K EXPECTED
14H30 US UNEMPPLOYMENT 3.7% EXPECTED
ZAR lost ground after a positive start in JHB trading
The Rand back above R19/$ and threatening the topside of the range after a “negative European session for Risk”.
The dollar index trading at 106.50 at mid-day.
- The buck finding support from news that US legislators were able to strike a last minute deal to avoid a government shutdown.
- The index also remained close to ten-month highs and rallied 2.5% in September on the back of a higher-for-longer view on US interest rates.
- The Federal Reserve kept policy rates unchanged at its September meeting.
The economic calendar headlined by US Non-farm payrolls on Friday with as well as various Fed speakers on the agenda.
- The most is notable Jerome Powell at 17h00 today.
The ZAR retreating after gaining in early trading after risk asset rebounded in Asian trading following news of BOJ QE actions.
- Stocks however lower on the back of stronger yields.
BUY USDZAR towards the bottom of the range and go with break
-158 to 33,5076
-11 at 4,288
+18 to 14,768
Image: Trading Economics
SA-UKRAINE VISIT COSTS
President Cyril Ramaphosa has dodged a parliamentary question on the full cost of his Ukraine-Russia peace mission in June, saying it would be revealed in the Presidency’s annual report.
He’s also deferred another question from DA leader John Steenhuisen on the cost of the chartered plane on which his protection unit and a media contingent were trapped for over a day.
Over 100 security forces personnel were initially denied entry into Poland from where they were due to accompany the president to Ukraine.
The delays over a dispute with authorities about the weapons on board the aircraft.
SA OIL EXPLORATION
SA minister gives green light to TotalEnergies drilling off Cape coast.
After the latest in a series of challenges seeking to halt energy companies exploring for new offshore discoveries at the foot of Africa.
South Africa’s environment ministry has rejected a wide-ranging appeal against Total Energies’ drilling for gas and oil in Block 5/6/7 off the Cape coast.
This after the latest in a series of challenges seeking to halt energy companies exploring for new offshore discoveries at the foot of Africa.
US stock futures jumped before declining after the US legislators were able to come to a temporary agreement that would keep the government open for 45 more days.
Dow and S&P 500 futures gained about 0.4%, while Nasdaq 100 futures rallied 0.6%.
Last month marked the worst monthly performance of the year for the S&P 500 and Nasdaq Composite, losing 4.9% and 5.8%, respectively.
They also ended the quarter down 3.7% and 4.1%, respectively.
Moreover, the Dow finished the month 3.5% lower and the quarter 2.6% in the red.
Investors now look ahead to purchasing and construction spending data on Monday and a slew of corporate earnings report to gauge the health of the economy.
Source: Trading Economics
The yield on the US 10-year Treasury note climbed to 4.61% to kick off the October month, holding close to sixteen-year highs, as traders refocus on the Fed’s next steps and await fresh data.
Meanwhile, US lawmakers managed to avert a government shutdown.
A bill ensuring funding until November 17th received support and was promptly signed into law by President Biden just minutes before the deadline, providing some relief to investors.
At the same time, the outlook for sustained high interest rates persists. with traders awaiting a batch of appearances from several Fed officials.
On the data front, the payrolls report due Friday will also be keenly watched.
Stocks lower in Asian trading.
In Japan , the Nikkei 225 Index fell 0.31%, reversing gains from earlier in the session as investors continued to assess the economic, inflationary and interest rate outlook globally.
Data also showed that Japan’s manufacturing PMI was revised lower in September, pointing to the fourth consecutive month of contraction in the sector.
Meanwhile, a BOJ survey showed that sentiment among Japanese companies improved markedly in the third quarter, raising optimism about the economic outlook.
Oil prices rebounding.
Brent crude futures strengthened above $92 per barrel on Monday after falling for two straight sessions.
Risk sentiment improved after US legislators were able to strike a last minute deal to avoid a government shutdown.
Investors were also focused on a tight global supply outlook ahead of an OPEC+ meeting on Wednesday.
Still, analysts expect no policy changes from OPEC+ this week as tighter supplies and rising demand kept the market supported.
The international oil benchmark finished September and the third quarter up about 7% and 23%.
Prices supported mainly by extended supply cuts by Saudi Arabia and Russia.
Source: GULF news
Precious metals decline sharply.
Gold sharply below $1,850/oz on Monday, sinking to its lowest levels in seven months amid pressure from a strong dollar and elevated Treasury yields.
Investors fretted about the prospect of a higher-for-longer interest rate scenario in the US after the Federal Reserve delivered a hawkish pause at its September policy meeting.
Higher rates raise the opportunity cost of holding non-yielding bullion, denting its appeal.
Meanwhile, data released last week showed that the Fed-preferred core PCE price index rose less than expected in August.
The US economy maintained a fairly solid pace of growth at 2.1% in the second quarter.
Investors now look ahead to key US jobs data this week for further guidance.
Dollar back on the front foot.
The dollar index steadied above 106 on Monday after facing pressure in recent sessions, finding support from news that US legislators were able to strike a last minute deal to avoid a government shutdown.
The index also remained close to ten-month highs and rallied 2.5% in September on the back of a higher-for-longer view on US interest rates.
Meanwhile, data released last week showed that the Fed-preferred core PCE price index rose less than expected in August, while the US economy maintained a fairly solid pace of growth at 2.1% in the second quarter.
The dollar held steady against most major currencies, but continued to strengthen against the Yen and the Aussie.
Yields continue to rise supporting the Dollar.