The ZAR weakened to 16,1200 on Thursday on broad-based US dollar rally.
- The Rand weakened to 16.1200 after the Dollar took off, however Gains were limited after the USA printed a negative Q1 GDP print.
- Traders now speculating the GDP contraction could lead to the Fed being less aggressive.
- At the time of writing the ZAR trading at 15.8800, as it rebounds from Thursday’s 18 week lows.
- The local unit however remaining in the cross-hairs, as the ZAR, is at its lowest since January 4th.
- A stronger dollar as investors focused on growth risks and rapid US interest rate hikes.
- Domestically, rolling power cuts, flood damage and signs of a Covid-19 comeback added to worries about the country’s economic outlook.
- However, expectations of continued monetary policy tightening by the South African Reserve Bank limited further losses.
- SA PPI rose 11.9% YOY March of 2022, accelerating from a 10.5 percent increase in the previous month and above market expectations of 10.8 percent.
Today: expect some ZAR gains and also risk asset gains, as traders/investors cover short positions on the final trading session of the month.
- USDZAR : Expect a range 15.6800-16.1400
- Importers 15.8300-15.6800
- Exporters 16.0100-16.1400
- EURZAR : Expect a range of 16.6300-16.9500
- Importers 16.6700-16.6300
- Exporters 16.8400-16.9500
- GBPZAR : Expect a range of 19.7000-20.1200
- Importers 19.7900-19.7000
- Exporters 19.9700-20.12000
- USDZAR 15.8700
- EURZAR 16.7200
- GBPZAR 19.8600
- Record high SA PPI: Producer prices in South Africa rose 11.9 percent year-on-year in March of 2022.
- The index accelerating from a 10.5 percent increase in the previous month and above market expectations of 10.8 percent.
- It was the highest producer inflation since comparable records began in 2013. Stats SA
- This will no doubt turn the attention to the SARB , who will pay close attention if it filters through into CPI.
- Such a move will undoubtedly force the SARB hand to once again tighten monetary policy.
- Hospitality union group (FedHasa), has called on municipalities to lower rates and utility charges to aid recovery in the industry and further boost employment.
- The group’s MD, Marc Wachsberger, said the tourism industry, had suffered significantly during the wake of the pandemic.
- He also said the industry is struggling to recover because it is obligated to pay the same rising municipal rates, taxes,
- As well as inflated utility costs as the sectors that survived and thrived during the pandemic. Moneyweb
- SA retail giant Clicks Group reported a 26% surge in diluted headline earnings per share (Heps).
- The results were for the six months ended February 28 2022 on Thursday.
- The company reported group turnover up 9% to R19.6 billion for the interim period, while retail sales showed a double-digit increase of 13.6%.
- The group says it has been supported by the country’s ongoing vaccination programme, while its expanding customer base also contributed to the robust performance. Moneyweb
- SA energy giant SASOL said it is focusing on “green hydrogen” to take advantage of the opportunities provided via the War in Ukraine.
- Europe’s scramble to find new sources of energy to reduce its reliance on Russia has given Sasol, South Africa’s biggest fuel producer, a new purpose to accelerate its green hydrogen plans.
- Sasol is focusing on green hydrogen – made by machines called electrolysers that are powered by the wind and sun – in South Africa’s northwest coast.
- The company is doing a feasibility study that it expects to complete in two years, according to Sasol’s chief executive officer Fleetwood Grobler. Reuters
- South African Airways (SAA), interim CEO Thomas Kgokolo is to leave the airline at the end of April 2022.
- Kgokolo was appointed in April last year on an interim basis when SAA exited business rescue.
- The move allows for the transition to the new 51% shareholder Takatso consortium. EWN
- US stocks extended gains in the final hour of trading on Thursday.
- The market rallying on earnings and ignoring negative GDP numbers and inflationary concerns.
- The Dow up as much as 614 points, the S&P 500 raising 2.5%, and Nasdaq climbing 3.1%.
- Facebook-owner Meta Platform was more than 18% after the company posted upbeat earnings and user growth
- Upbeat earnings lifted sentiment, despite an unexpected negative Q1 GDP print of -1.4%.
- However, after the bell, Apple shares fell after Tim Cook warned of a possible $8 billion hit from supply constraints.
- The yield on the 10-year US Treasury, consolidated around the 2.85% level.
- It was not far from a 3-year high of 2.98 touched last week,
- The theme remains with investors pricing chances of an increasingly hawkish Federal Reserve stance.
- The Fed meets next week, in the much anticipated FOMC meeting.
- The Dow added 614 to close at 33,916
- The SP500 gained 103 points to close at 4,287
- The Nasdaq gained 382 points to close at 12,871
- image source: Trading Economics
COVID-19 SOURCE https://www.worldometers.info/coronavirus/
Cases / Deaths / Recoveries
- Russia’s President Vladimir Putin has warned the West of a “lightning fast” response to any country that intervenes in its war against Ukraine and creates what he called “strategic threats for Russia.”
- U.S. President Joe Biden has asked Congress to approve $33 billion in additional money for the Ukraine war, which includes funding for U.S. military support to the embattled nation and a mix of direct cash and supplies for Ukraine. Reuters
- Also, U.S. President Joe Biden said he will visit a Lockheed Martin plant in Troy, Ala. on Tuesday to thank the workers who are manufacturing Javelin missiles being sent to Ukraine. NBC
- In dismissing threats from Putin, NATO Secretary-General Jens Stoltenberg said Finland and Sweden would be “welcomed with open arms to NATO” .
- “It’s their decision,” Stoltenberg said. “But if they decide to apply, Finland and Sweden will be warmly welcomed, and I expect that process to go quickly,” he said, without offering a timeline.
- He said the Nordic nations are NATO’s closest partners and already have “strong and mature democracies.” CNN
- WORLD 511,599,167 / 6,253,610 / 465,318,900
- USA 82,888,247 / 1,019,774 / 80,585,919
- SA 3,776,298 / 100,351 / 3,638,087