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Morning Wrap

21 August 2023

Good Morning

The ZAR opening weaker after China concerns, dampen risk appetite in early Monday trading.  

Market Movement Today:

  • The Rand opening weaker at R19.0300/$ and off stronger levels reached on Friday (R18.900/$).
    • Risk assets lower in early Asian trading following more concerns out of China and the property sector.
    • Earlier this morning People’s Bank of China lowered its one-year loans prime rate by 10 basis points to a record low of 3.45%.
    • The decision came after China’s central bank urged financial institutions over the weekend to increase lending in order to shore up an ailing economy
  • Risk asset sentiment remaining negative on the back of Chinese reports with stocks lower and the Dollar higher in early trading.

  • Locally, the much awaited BRICS summit kicks of in Sandton, Johannesburg today.
    • Traders eagerly awaiting major policy decisions and its effect on the ZAR.
    • Ramaphosa defended SA’s participation  and supported an argument to expand the bloc.
    • Over 20 countries, including Iran, Cuba, Argentina, Sudan and Saudi Arabia have applied to join BRICS.
  • Overall, the US Dollar remains on the front foot, with US yields continuing to support the Dollar.
    • We expect this to continue and be Dollar supportive.
    • Trade : BUY USDZAR on dips

Markets this morning:

  • USDZAR 19.0300
  • DOLLAR 103.38
  • EURUSD 1.0880
  • SP500 4,366
  • GOLD 1889
  • US10YT 4.30%

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