31 August 2023
Support & Resistance Levels
Data This Week
Support & Resistance Levels
ZAR sharply lower after weaker SA PPI data.
Today’s Market Support and Resistance Levels:
Data This Week
08H00 SA M3 MONEY SUPPLY 10.8% EXPECTED VS 11.15% PREVIOUS.
08H00 SA PRIVATE SECTOR CREDIT YOY 6.2% EXPECTED 6.25%.
14H00 GERMAN INFLATION YOY 6% EXPECTED 6.2% PREVIOUS.
14H15 US ADP ( PRIVATE PAYROLLS) 195K PREVIOUS VS 324K EXPECTED.
14h30 US GDP 2.2% EXPECTED VS 4.1% PREVIOUS QoQ.
14H30 US PCE 3.8% EXPECTED VS 4.9% PREVIOUS.
16H00 US PENDING HOMESALES -12% ESTIMATE VS -15.6% EXPECTED.
11H00 EU INFLATION RATE 5.1% ESTIMATE VS 5.3% PREVIOUS.
11H30 SA PPI INFLATION 2.9% EXPECTED VS 4.8% PREVIOUS.
14H30 US CORE PCE 4.2% VS 4.1% PREVIOUS YOY.
14H30 US JOBLESS CLAIMS 235K VS 230K PREVIOUS.
15H45 US CHICAGO PMI 44 VS 42.8 PREVIOUS.
14H30 US NON FARM PAYROLLS 170K VS 187K PREVIOUS.
14H30 US UNEMPLOYMENT RATE 3.5% VS 3.5% PREVIOUS.
16H00 US ISM MANUFACTURING 47 EXPECTED VS 46.4.
The Rand traded sharply weaker after some EM risk-aversion as well as weaker than expected SA PPI data
The local unit breaking through multiple support levels and reversion recent hard earned gains.
- The annual producer price inflation in South Africa eased significantly to 2.7% in July 2023.
- The reading down from 4.8% in the previous and below market forecasts of 2.9%. It was the softest reading since October 2020.
In addition, Core PCE prices in the US, which exclude food and energy, increased by 0.2% month-over-month in July.
- The reading maintaining the same pace as in June and aligning with market expectations.
- The annual rate, regarded as the Federal Reserve’s preferred measure of inflation, saw a slight rise as anticipated, reaching 4.2% from June’s 4.1%.
The Dollar holding onto hard earned gains, and we expect the ZAR to be on the defensive heading into tomorrow’s key NFP report.
Trade : Go With Break.
+115 to 35.005
+17 to 4.532
+94 at 15.560
image: Trading economics
JOBURG CBD FIRE
At least 73 people died and more than 50 others injured after a fire broke out at a five-story building in the Johannesburg CBD.
Recovery operations are continuing inside the Albert Street building after a fire that has officially claimed 73 lives including seven children.
The death toll is expected to rise however, as more parts of the building is searched and cleared of debris.
City of Joburg officials are expected to brief the media at 16:00, at which time a full update on the ongoing emergency response and investigation measures will be provided.
ESKOM POWER CUTS CONTINUE
Stage 4 power cuts will continue for the rest of the week with a chance of relief only expected on Sunday morning after 5am when struggling power utility Eskom predicts its generation units will have recovered enough to switch over to stage 2.
Eskom issued an update on the state of its power generation system on Thursday, noting that the increased level of load shedding is necessary to recover emergency generation reserves and perform maintenance to prepare its ailing systems for the coming week.
Major US stock indices advanced on Thursday, set to extend gains for a fifth consecutive session.
The latest economic data backed expectations that the Federal Reserve may refrain from hiking rates further this year.
The core PCE price index edged 0.2% higher in July, marking the lowest back-to-back rise in over two years and extending disinflation hopes from the latest CPI report.
Additionally, job cuts from August surged over 200% from the previous month, aligned with soft labour data released this week ahead of tomorrow’s NFP report.
The Dow Jones added 150 points, outperforming other benchmarks amid a 5% surge for Salesforce after the company upgraded profit forecasts.
Source: Trading economics
The yield on the 10-year US Treasury note held its decline at the 4.1% mark on Thursday.
The latest economic data backed expectations that the Fed may refrain from raising interest rates in the current cycle, supporting demand for bonds in the secondary market.
The Core PCE price index edged 0.2% higher in July, unchanged from June’s seven-month low to mark the lowest back-to-back increase in over two years.
Data also pointed to a softer labour market ahead of tomorrow’s NFP report.
The results aligned with Fed Chair Powell’s Jackson Hole statements that there is uncertainty on the duration of policy transmission lags, driving policymakers to heed overtightening risk. Source: CNBC
Asian equities higher after another Wallstreet rally.
The Nikkei 225 Index climbed 0.88% to close at 32,619, with both benchmarks rising for the fourth straight session.
The moves mirroring moves on Wall Street overnight as weaker-than-expected US data suggested the Federal Reserve could be done with policy tightening.
Investors also reacted to data showing Japanese retail sales grew more than expected in July, while industrial production declined more than anticipated.
Oil prices spike higher.
US WTI crude futures held above $81 per barrel on Thursday after rising for five straight sessions.
o Prices spiking after a large decline in US crude inventories and expectations that OPEC+ leaders will keep global supply tight.
EIA data showed that US crude stockpiles tumbled by 10.6 million barrels last week, far exceeding forecasts for a 3.3 million barrel draw.
There are also speculations that Saudi Arabia and Russia would extend output and export cuts into October, although no official decision has been made.
Source: Gulf News
Precious metals lower after Dollar rebound.
Gold rallied off highs but remain above $1940/oz.
The yellow metal supported by weaker-than-anticipated US economic data which bolstered bets on the less hawkish stance from the Federal Reserve.
A lower dollar and US Treasury yields also kept the metal at one-month highs. The latest releases showed the world’s largest economy expanded less than projected in the second quarter, while private job growth eased to the 5-month low, suggesting cooling in the labour market.
Additionally, core PCE price index edged 0.2% higher mom in July, in line with estimates.
The focus will now shift to the US nonfarm payrolls on Friday for further clues on the monetary policy.
The dollar index maintained its early gains, trading above the 103 mark on Thursday.
The Buck recovering after losing about 1% over the past three sessions. Investors were processing a series of economic data that revealed a substantial increase in consumer spending during July, coupled with a rise in core PCE price inflation.
Traders unwinding short dollar bets after PCE remained above 4%.
Source : Forexlive