Afternoon Note
22 September 2023
Support & Resistance Levels
Data This Week
Market Highlights
Market Close
South Africa
Global Markets
Overnight Headlines
ZAR range trading continues in early trading as the local unit looks for direction from international markets.

Today’s Market & Resistance Levels
Data This Week
Monday
Nothing of significance
Tuesday
11H00 EU INFLATION 5.3% EXPECTED YOY
14H30 US BUILDING PERMITS 1.44MM
Wednesday
08H00 UK INFLATION 7.1% CPI YOY EXPECTED
10H00 SA INFLATION 4.9% EXPECTED VS 4.7 PREVIOUS
13H00 SA RETAIL SALES -0.5% MOM EXPECTED VS +0.2% PREVIOUS
20H00 US FED FOMC RATE DECISION – UNCHANGED EXPECTED
20H30 US FED PRESS CONFERENCE
Thursday
15H00 SA SARB MPC UNCHANGED REPO AT 8.25%
16H00 ECB LAGARDE SPEAKS.
Friday
01H30 JP INFLATION AT 13H30
05H00 JP BOJ DECISION
Market Highlights
The ZAR continues to hold below the R19/$ level as the unit once again threatens the R18.80/$ level.
Markets pretty undecided and after 2 days of risk asset selling, stocks as well as G7 Fx recovering in Friday’s European trading session.
Both the Fed, BOE and SARB announcements continue weigh on markets.
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- Earlier this morning the BOJ maintained their zero rate policy providing markets with a little boost ahead of the long weekend.
ZAR traders happy to play the range, but the USDZAR rate does appear heavy as it once again tests 18.8000.
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- Levels above 19 (for now) being rejected.
This afternoon’s US PMI’s likely to provide more evidence of a roaring US economy and for the Fed to leave “rate higher for longer”.
The ZAR on a relative basis remains well bid vs the Dollar and the crosses.
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- This even as the US dollar makes a run at 106 and USDJPY at 150.
- We expect the relationship to hold and the ZAR to weaken accordingly.
At the time of writing we have DXY 105.58, GOLD 1925, Brent crude 94.35 and the US10YT 4.48%.
Trade: Buy USDZAR on dips , add through R19.10/$
Market Close
DOW
-370 to 34,447
SP500
-37 to 4,330
NASDAQ
-245 to 14,700
Overnight Trading

Image: Trading Economics
South Africa
JOBURG TAPS RUN DRY
Johannesburg Water says most of its systems have lost capacity and are now on their last legs.
This follows a power failure at the Zuikerbosch Water Treatment Plant on Tuesday night.
It came as the city was already experiencing shortages because of a recent spike in demand.
Johannesburg Water says South Hills Tower is now empty with no water expected in the supply zone.
In Midrand, meanwhile, the Grand Central, Errand and President Park reservoirs and towers are also low to empty.
Johannesburg Water says alternative water supplies have been made available to those affected.
It also urged the public to adhere to the level water restrictions currently in place until the end of March.
Source: EWN
ESKOM CEO SEARCH
Eskom board at odds with Gordhan over CEO search.
Eskom said it reviewed 150 potential candidates in its global search for a CEO and had identified ‘a clear number one,’ with two others as joint runner-up.
The protracted search for Eskom’s new chief executive officer has raised tensions between the Gordhan and the Eskom board.
Andre de Ruyter announced his resignation as CEO nine months ago, yet a permanent replacement hasn’t been named despite an ongoing energy crisis that is taking an ever-increasing toll on the economy.
A candidate put forward by the board was rejected by Public Enterprises Minister Pravin Gordhan, News24 reported on Wednesday.
Some board members threatened to quit in the coming weeks if Gordhan rejects their recommendation, another person said.
Source: Moneyweb
Global Markets
Stocks
US stock futures edged higher on Friday after the market saw another day of heavy losses during Thursday’s regular session.
Traders citing the Federal Reserve’s hawkish pause this week continued to weigh on sentiment.
The Fed kept interest rates unchanged as widely expected on Wednesday, but signalled another rate hike before the end.
In regular trading on Thursday, the Dow fell 1.08%, the S&P 500 tumbled 1.64% and the Nasdaq plunged 1.82%.
Those losses came as the 10-year Treasury yields surged to 16-year highs on the back of the central bank’s hawkish tone.
Investors were also kept on edge about a government shutdown after House Republican leaders sent the chamber into recess on Thursday.
Source: Trading Economics
Bonds
The yield on the US 10-year Treasury note surged by nearly 13 basis points, almost touching 4.5%, the highest level since October 2007.
Traders grew increasingly convinced that interest rates would have to stay elevated for longer as the US economy remains strong.
Additionally, the yield on the 2-year note spiked to almost 5.2%, approaching its highest level since November 2000.
The Federal Reserve kept interest rates steady in its September meeting as expected, but paved the way for an additional rate hike this year.
It also trimmed the amount of expected rate cuts for 2024 as it revised GDP higher in 2024.
Source: CNBC

Overnight Headlines
