Morning Wrap

• 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%