04 September 2023
Support & Resistance Levels
Data This Week
Support & Resistance Levels
ZAR weakened in early Monday trading, reaching R18.900/$ on the back of a broad-based Dollar rebound.
Today’s Market Support and Resistance Levels:
Data This Week
09H15 S&P SA PMI’S 49 F/CAST VS 48.2 pREVIOUS
11H30 SA GDP GROWTH RATE 1.1% YOY EXPECTED VS 0.2% PREVIOUS
16H00 US FACTORY ORDERS -2.5% EXPECTED VS 2.3% PREVIOUS
17H30 US TREASURY BILL AUCTIONS 3M AND 6M
16H00 US ISM SERVICES PMI 52.5 EXPECTED VS 52.7 PREVIOUS
11H00 SA CURRENT ACCOUNBT R-178BN VS R-66BN PREVIOUS
14H30 JOBLESS CLAIMS 235K EXPECTED VS 228K
10H00 SA CONSUMER CONFIDENCE -28 F/CAST VS -25 PREVIOUS
The Rand suffering losses of nearly 30 cents since the Friday “NFP high” of R18.6000/$
The local unit trading sharply higher to reach R18.9000 at high noon.
Traders citing poor liquidity conditions due to the US Labour day holiday but also overall Dollar strength.
Yields also higher after stronger than expected PMI data and after Cleveland Fed’s Loretta Mester said “…inflation remains too high and the labour market remains historically strong…”.
- The comments clashed with a batch of softer-than-expected labour data.
- This after the unemployment rate rose past expectations and wage growth rose at a slower pace.
Dollar buying the order of the day, with the markets bracing for tomorrow’s SA GDP and US services PMI.
Technically we appear to be testing the topside of the USDZAR , R18.60-18.90/$ range and market momentum pointing to a break.
- If confirmed USDZAR target R19.0800 before R19.2500.
NB, we expect a muted session due to the American’s celebrating their Labour day holiday.
Trade : Long Dollars, add above R18.9000/$
+115 to 34,838
+8 to 4,515
-3 to 15,572
image: Trading economics
LADY R REPORT
The full panel report into the now-debunked claims that SA supplied Russia with arms through the Lady R cargo vessel will be kept classified.
President Cyril Ramaphosa said he would release an executive summary of it on Monday.
He added that he would not disclose the independent panel’s full investigative report into the Russian cargo vessel.
In a Sunday evening address to the nation, Ramaphosa confirmed that the probe, led by retired judge Phineas Mojapelo, found no evidence that arms were loaded onto the ship, putting an end to months of speculation.
He added, “No evidence weapons were loaded onto the ship” – Ramaphosa on Lady R probe.
Transnet dagger pointed at the heart of SA’s economy.
The ports and rail operator will knock 5% off GDP in 2023, coming on top of a negative 6% in 2022.
A study by the GAIN Group says inefficiencies at Transnet are costing the economy R1 billion a day, the Study added, most of this coming from lost sales of coal and iron ore.
The GAIN Group study comes just days after Transnet announced a R5.7 billion loss for the year to March 2023.
It was reversing the R5 billion profit for the previous year.
The logistics operator blamed lower rail volumes due to operational ineffectiveness and flooding in Kwazulu-Natal.
The Dow Jones closed 116 points higher on Friday, the S&P 500 added almost 0.2% and while the Nasdaq finished marginally lower.
The index closes following job data that showed the labour market is cooling, to give Fed room to pause the tightening cycle.
The US economy added 187K jobs, exceeding market expectations of 170K but following a 110K downward revision to the prior two months of payrolls.
Also, the jobless rate rose to 3.8%, the highest since February 2022 and above forecasts of 3.5%.
On the other hand, Broadcom fell by 5.5% and VMware lost 2.8% on disappointing updates.
On the week, the Dow is up 0.6% so far, the S&P 500 1.9% and the Nasdaq 2.6%.
Source: Trading economics
The yield on the US 10-year Treasury surged toward the 4.2% mark on Friday, rebounding from the three-week low of 4.06% earlier in the session as markets assessed the Fed’s policy outlook this year.
Better-than-expected PMI data in the US eased concerns over the extent of manufacturers’ slowdowns.
However, Cleveland Fed’s Loretta Mester said that inflation remains too high and the labour market remains historically strong.
In the meantime, the sharp increase in bond supply by the US Treasury during August auctions, paired with an increasing concern about unsustainable budget deficits, heightened the risk of holding US bonds –
Resulting in HIGHER US YIELDS.
Asian equities higher after another Wallstreet rally.
In Japan , the Nikkei 225 Index climbed 0.7% to close at 32,939.
Japanese shares benefited immensely in the past two weeks from growing expectations that the FOMC is done hiking rates amid signs that the US economy may be cooling.
Resource-related stocks led the advance on stronger commodity prices, with gains from Kobe Steel (6.1%), Nippon Steel (3.9%).
Oil price rally continues.
US WTI crude strengthened above $85/bl on Monday, hovering at the highest levels in over nine months.
Prices underpinned by expectations that OPEC+ leaders would extend measures to keep oil supplies tight.
Russian Deputy Prime Minister Alexander Novak said on Thursday that Russia agreed with its OPEC partners on the parameters for continued export cuts.
Saudi Arabia is also expected to extend its voluntary 1 million barrels per day output cut into October.
On the demand side, a surprise expansion in Chinese manufacturing activity, raised optimism about the economic health of the world’s largest oil importer.
Source: Gulf News
Precious finding support but under pressure.
Gold held above $1,940/oz on Monday, hovering near its strongest levels in a month as signs of cooling in the US economy raised hopes that the Federal Reserve is done hiking interest rates this year.
The latest US jobs report showed the US unemployment rate unexpectedly rose to 3.8% in August, the highest since February 2022 and above market expectations of 3.5%.
Meanwhile, the US economy added 187,000 jobs last month, exceeding forecasts of 170,000 , allowing for support for the Dollar at the expense of the yellow metal.
US yields higher providing support for the Dollar.
Dollar higher after Fed comments.
The dollar index steadied above 104 on Monday after rising for two straight sessions, as investors continued to assess the outlook for US interest rates in light of the latest batch of economic data.
The jobs report showed the US unemployment rate unexpectedly rose to 3.8% in August, BUT the economy added 187,000 jobs last month, exceeding forecasts of 170,000.
Also , ISM data showed that US manufacturing activity improved in August, but stayed contractionary for the tenth consecutive month.
Markets are betting that the Federal Reserve will hold interest rates steady this month, and see a greater chance that it will not hike rates further this year.
Source : Forexlive