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SUMMARY
The Rand lost 3.31% on the back of news that the independent panel found that Ramaphosa has a case to answer and that he may have committed serious misconduct inconsistent with his office.
What we know so far :
- Following an investigation by the section 89 panel;
- The panel’s report states its concerns about Ramaphosa’s evidence when it comes to the exact amount of foreign currency for the buffalo sale.
- The panel said it finds the behaviour of Sudanese businessman Mr Hazim, in carrying more than half a million US dollars in cash into South Africa,
- and thereafter transporting it to the farm to be “un-businessmenlike”.
- The panel said there are “troubling unsatisfactory features” in the explanation of the source of the foreign currency given by the President.
- A spokesman for the Presidency said the report by the independent panel was noted and said he National Assembly needs to consider the findings and determine the most appropriate way forward.
- The idea that CR could be unseated sent local markets lower as we approach the ANC’s elective conference.
- Earlier, markets received a boost from Fed governor Jerome Powell who confirmed a 50 bps hike for December .
- The news sent the SP500 higher and the Dollar lower across the board.
- Unfortunately CR’s woes were seen as a “stability” threat and the ZAR lost ground.
- Markets now waiting to see what transpires in the National assembly as the chamber is set to debate the findings against Ramaphosa.
- US 10YT 3.62%
- US dollar index 105.48
Significant Market Data:
Yesterday
- 10H00 : SECTION 89 PHALA-PHALA REPORT PRESENTED TO THE SPEAKER OF PARLIAMENT
- Will not be discussed in the national assembly.
- 14H00 : SA BALANCE OF TRADE R+24BN VS R19.7 BN PREVIOUS
- 15H30 : US GDP GROWTH +2.7% EXPECTED VS -0.6% PREVIOUS , ESTIMATE Q3
- Actual was 2.9% ( allowing more scope for the FED to increase rates).
- 20H00 : US FED CHAIR JEROME POWELL SPEAKS
- Dovish comments supporting a 50 bps hike in December.
Today
- 15H30 : US PCE INDEX 5.9% CONSENSUS VS 6.2% PREVIOUS
- 17H00 : US PMI MANUFACTURING 49.8 EXPECTED VS 50.4 PREVIOUS
Friday
- 15h30 : US NON-FARM PAYROLLS +200K EXPECTED VS +261K PREVIOUS
- 15h30 : US UNEMPLOYMENT RATE 3.7% EXEPCTED VS 3.7% PREVIOUS
Today:
- The ZAR opening sharply weaker on the back of the Phala-Phala report, that questioned CR’s actions.
- The SA National assembly likely to debate the report before deciding on further actions.
- Earlier, the Dollar declined sharply as US yields declined to 3.62% following Jerome Powell’s comments of a 50 Bps hike in December.
- The DXY falling to as low at 105.48.
- Under normal circumstances the ZAR would be trading significantly stronger, but the CR risk a major factor in keeping the ZAR above R17/$
- We do however expect a stronger ZAR in Q1 of 2023 on the back of a FED Pivot .
- BUT : In the long monetary policy generally wins out , hence the expectation for a stronger ZAR .
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Trade:
- NB: Until we have clarity on the President’s future it would be unwise to run “ 2-way risk” and we encourage
- Both importers and exporters to cover short term exposures.
Expected Ranges
- USDZAR: Expect a range 16.9500-17.5400
- Importers 17.1800-17.0000
- Exporters 17.2000-17.4900
- EURZAR: Expect a range of 17.7100-18.2000
- Importers 17.9100-17.8100
- Exporters 18.1800-18.0100
- GBPZAR: Expect a range of 20.6400-21.1000
- Importers 20.7500-20.5300
- Exporters 20.8600-21.0000
*We also want to apologize for the late Note this morning, we had technical difficulties and was only able to send it out now. Excuse us for any inconvenience caused.
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