Afternoon Note
06 October 2023
Support & Resistance Levels
Data This Week
Market Highlights
Market Close
South Africa
Global Markets
Overnight Headlines
ZAR reaching weakest level since June 2023, breaching 19.5000 in early JHB trading.

Today’s Market & Resistance Levels
Data This Week
Monday
Tuesday
14h00 ATLANTA FED Raphael Bostic speaks
16h00 US JOLTS JOB OPENINGS 8.8M EXPECTED
Wednesday
09H15 SA GLOBAL PMI 50.3 EXPECTED
10H00 ECB’S LAGARDE SPEAKS
11H00 EU RETAIL SALES -0.3% MOM
11H00 EU PPI 0.6% MOM EXPECTED
14H15 US ADP EMPLOYMENT DATA +153K EXPECTED
16H00 US ISM SERVICES PMI 53.6 EXPECTED
Thursday
14H30 US WEEKLY JOBLESS CLAIMS +210K EXPECTED
Friday
14H30 US NON FARM PAYROLLS +163K EXPECTED
14H30 US UNEMPPLOYMENT 3.7% EXPECTED
Market Highlights
The ZAR traded stronger ahead of this afternoon’s key NFP report
he local unit trading at 19.3500 as traders seen liquidating long Dollar positions ahead of the Jobs data.
This in contrasts to 24 hours ago , where investors sold ZAR after the SARB reiterated their policy was to ensure inflation is under control and not the futile attempt to affect the ZAR.
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- Longer term, the theme remains higher yields and this likely to keep risk assets (like the ZAR) under pressure.
We eagerly await today’s US NFP report at 14h30 today.
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- Payrolls likely to be affected by the on-going UAW strike.
- Thus US nonfarm payrolls likely increased by 170K last month, down from 187K in August.
- It would be the fourth consecutive month with job gains falling below the 200K mark (Includes the Auto workers strike).
We remain in a highly volatile session and this likely to continue until 14h30 today.
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- If payrolls surprise to the upside expect another “negative session for risk” I.E. WEAKER ZAR.
- Higher NFP ~ ADD TO LONGS WITH A BREAK ABOVE 19.5800 (ASIA HIGH).
If payrolls surprise to the downside expect a reversal “positive session for risk” I.E. STRONGER ZAR.
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- Lower NFP ~ EXIT LONGS WITH A BREAK BELOW 19.4200 (Wednesday HIGH).
Trade:
BUY USDZAR on dips (we are above 19.3000) Target 19.5000-19.8000
Market Close
DOW
-10 to 33,119
SP500
-5 at 4,258
NASDAQ
-16 to 14,760
Overnight Trading

Image: Trading Economics
South Africa
ESKOM LOADSHEDDING
Stage 2 load shedding indefinitely from Friday as 4 generation units go offline.
As a result of the loss of four generation units and the need to replenish reserves in preparation for the week ahead.
Stage 2 load shedding will be implemented from 05:00 on Friday until further notice, Eskom said on Thursday night.
It will communicate any further changes if necessary.
Source: EWN
MINING UNDER PRESSURE
Anglo Platinum CEO sees no immediate rebound in low metal prices.
“I really hope I am wrong, but the way I am setting up the business is that those prices are in place for a bit of time” said Craig Miller, CEO.
Anglo American Platinum, the world’s biggest platinum miner by value, said the low metal prices that companies in SA are currently grappling with could be sustained for a period of time.
He attributed it to a slowdown in China’s economic growth.
Prices for platinum-group metals, which have declined rapidly over recent months, could remain depressed, Craig Miller, CEO of the Johannesburg-based producer, told Reuters.
Source: Moneyweb
Global Markets
Stocks
Stocks lower.
US stock futures steadied on Friday as investors braced for the September jobs report that could influence the interest rate outlook.
Analysts expect the economy to have added fewer jobs in September compared to August, and a softer-than-expected reading will likely drive bond yields lower and support equities.
In regular trading on Thursday, the Dow shed 0.03%, the S&P 500 lost 0.13% and the Nasdaq fell 0.12%.
Those losses came as investors digested data showing initial jobless claims once again came in below forecasts at 207K, remaining close to 7-month lows and pointing to a resilient labour market.
Still, the benchmark indexes recouped most of Thursday’s intraday losses, as a pullback in Treasury yields gave equities a much needed reprieve.
Source: Trading Economics
Bonds
The yield on the US 10-year Treasury note eased to the 4.7% mark from the 16-year high of 4.8% this week.
Markets awaited Friday’s jobs report for the latest insights on the US labour market.
The yield on the 10-year note remained nearly 15bps higher in October while that on the 30-year bond hovered close to 5%.
Labour market tightness and strong growth during periods of high inflation drove markets to agree that neutral interest rates have shifted considerably higher since the 2008 recession.
It makes today’s jobs report all the more important.
Additionally, services and manufacturing ISM PMIs both backed optimism on economic performance.
Fed policymakers Bowman and Mester flagged the possibility of another rate hike this year, while Bostic warned that the funds rate will need to remain at the terminal level for longer.
Source: Bloomberg

Overnight Headlines
