The ZAR recovered to open at 16.3000 after weakening to 16.4900 on the back of ESKOM stage 6.
On the data front:
- Wednesday : 20H00 : US FOMC MINUTES.
- Friday : 14H30 : US NON-FARM PAYROLLS : +270K EXPECTED vs 390k previous
- Expect a range bound session, due to the US holiday.
- However, any news out of ESKOM +/- could result in sharp moves in the local unit.
- The likely hood of positive announcement likely to send the local unit stronger.
- Also US10YT below 3.00% following a flight to safety likely to support the local unit.
- This morning we opening in the middle of the previous session’s range.
- A test of either side likely based on the ESKOM negotiations.
- A break of 16.3600 targets 16.5000.
- Likewise a break of 16.2500, opens up a swift return back to the figure R16/$.
- USDZAR : Expect a range 16.2200-16.4300
- Importers 16.2900-16.2200
- Exporters 16.3600-16.4300
- EURZAR : Expect a range of 16.8900-17.1800
- Importers 16.9600-16.8900
- Exporters 17.1300-17.1800
- GBPZAR : Expect a range of 19.6400-20.0100
- Importers 19.7200-19.6400
- Exporters 19.8200-20.0100
- USDZAR 16.3300
- EURZAR 17.0300
- GBPZAR 19.7700
- Eskom announced stage 6 will continue this week as it says its system remains vulnerable.
- The country is currently flipping between stages 4 and 6 which will persist until next Sunday midnight.
- Eskom said it will take a few weeks for its power generation system to fully recover to pre-strike levels.
- The SOE blaming the recent unprotected strike by some workers for the rolling blackouts.
- Unions and the utility are still engaged in wage talks. EWN
- South Africans are bracing themselves for another fuel price increase this week.
- Economists have warned that a massive petrol price hike was on the cards.
- There’s also been speculation that consumers could be paying close to R25 for a litre of 93 octane from Wednesday.
- The DA said that it believes that the fuel increase will result in a more severe financial and humanitarian crisis in the country.
- DA MP Kevin Mileham is expected to brief the media on Monday on the party’s fuel price deregulation bill submission to Parliament.
- It said that the proposal will bring relief to cash-strapped South Africans and get government off the hook as far as the fuel price in concerned. EWN
- Stocks in New York closed higher in the first session of the Q3, as stocks bounced back from earlier losses amid thin trading volumes ahead of a holiday-extended weekend.
- In regular trading, the Dow was up 322 points, the S&P 500 rose 1.1%, and the NASDAQ booked a 0.9% gain.
- Still, all three indexes posted weekly losses, NASDAQ underperformed with a 4.1% loss, the S&P fell 2.2% and the Dow shed 1.3%.
- Investors remained concerned after dire consumer morale and worse-than-expected GDP figures.
- Last session, the Dow and the S&P 500 booked their worst 1st half performances since 1962 and 1970, respectively, while the Nasdaq saw its worst-ever half-year run.
- The yield on the US 10-year fell below the 2.9% mark. It was a level not seen in a month, as investors rushed to safe-haven assets.
- The move on the back of persistent fears that the Fed’s aggressive policies to tame inflation will eventually tip the US economy into a recession.
- Weak economic data last week fuelled those concerns further, namely signs of a slowdown in consumer spending and worse-than-expected GDP figures.
- Data indicating that price increases could be slowing but still near multidecade highs.
- In the EU, a deteriorating growth outlook and record inflation prompted a similar rush for government debt.
- It was reflected in Germany’s 10-year Bund yield tumbling below 1.5% for the first time in four weeks. source : US treasury
- The Dow added 321 to 31,097
- The SP500 added 39 to 3,825
- The Nasdaq gained 99 to 11,127
- image : Trading economics
- Asian stocks followed Wall Street after stocks in New York staged a comeback.
- In Japan, the Nikkei 225 rose 0.84% to close at 26,154, halting a three-day decline, with utility companies supporting the rebound.
- Japan continues to deal with an unprecedented heatwave that threatens power shortages.
- A fire that caused a shutdown in a 500 megawatt unit at Japan’s biggest power generator, JERA, exacerbated concerns over a prolonged electricity crunch.
- In Australia, the ASX 200 gained 1.1% to close at 6,613, after sliding for three consecutive sessions.
- Investors buying up beaten-down shares ahead of an expected interest rate hike from the Australian central bank.
- The Reserve Bank of Australia is expected to deliver another half-point rate increase on Tuesday to tame surging inflation.
- Aussie inflation accelerated to a 20-year high of 5.1% in the first quarter and projected to approach 7% by the end of 2022.
- The west continues to find and explore different ways of sanctioning the Russian government and economy because of the WAR with the Ukraine.
- U.S. President Joe Biden presented the idea of an oil price cap to the rest of the G-7 leaders and his counterparts agreed to look at how to do it.
- Energy analysts have questioned exactly how the G-7 can impose a price ceiling for Russian oil.
- Most warning that the plan could backfire if key consumers are not involved, and time may be running out to make it workable.
- Russia’s Deputy Prime Minister Alexander Novak said Wednesday the idea could push oil prices even higher. CNBC