The ZAR remained range bound ahead of today’s KEY US CPI data.
- The Rand remained inside the Week’s range with 17.6400 and 17.8800 key levels.
- Traders remain solely focussed on today’s US CPI WITH 8% EXPECTED, below the previous print of 8.2% .
- On the monetary side, the FED delivered a widely expected 75 bps hike last week as it seeks to bring down inflation to its 2% target.
- While recent data showed that the job market remains extremely tight, , all eyes turn to October inflation data for more clues on future interest rate hikes.
- The US 10YR AT 4.10% and the DXY at 110.00 .
- Both likely to affected after the DATA.
- Local SA manufacturing and mining data, unlikely to be market movers.
- Asian markets also trading lower, as traders preferred to exercise caution and not place any big bets ahead of the data.
- NB: Global inflationary pressures continues after Denmark’s inflation hit 10.1% vs 10.00% excepted , the highest since 1982 .
Significant Market Data:
- 11h30: SA mining, Gold and Manufacturing data
- Mining expected at -4.3% YOY vs -5.9% previous
- Gold expected at -15.7% YOY vs -17.4% previous
- NB: contraction continues in SA’s industrial sector, as the industry suffers at the hands of ESKOM and loadshedding and Labour demands.
- 15h30 : US INFLATION – CPI EXPECTED 8% VS 8.2% PREVIOUS
- 15H30 : US CORE INFLATION – 6.5% EXPECTED VS 6.6% PREVIOUS
- The ZAR continues to trade inside Monday’s range as markets remain focussed on the US CPI report later today.
- The local unit stuck below 17.8800 ( key level) – a break sees 18.0500
- And above 17.6400(support), a break targets 17.5000 .
- Pre-data : Market makers most likely to trigger stop losses on either sides of the ranges ahead of the data release.
- Given the importance of today’s number it is likely that one of the levels will be in play.
- Recap : higher than expected US CPI will result in a stronger Dollar and re-affirms the FED’s commitment,
- Lower than expected will set off a large amount of RISK ON BUYING , resulting in stronger ZAR .
- SA manufacturing and mining data not likely to be market movers given the importance of the US data.
- Trading range 17.6400-17.8800, NB : with a break – post data likely to determine the new trend for the Rand.
- USDZAR : Expect a range 17.6400-17.8800
- Importers 17.7200-17.6400
- Exporters 17.8000-17.8800
- EURZAR : Expect a range of 17.6700-17.9100
- Importers 17.7500-17.6700
- Exporters 17.8300-17.9100
- GBPZAR : Expect a range of 19.9900-20.4400
- Importers 20.1400-19.9900
- Exporters 20.2900-20.4400
- USDZAR 17.7500
- EURZAR 17.8200
- GBPZAR 20.2600
- Eskom says stage two power cuts will start from 9AM on Tuesday morning because of failing generating units at coal power plants.
- Spokesperson, Sikonathi Mantshantsha, said that stage two would continue until further notice. News24
- SIU OBTAINS ORDER TO FREEZE ASSETS OF FORMER ESKOM MANAGER & HER HUSBAND
- It’s understood that she siphoned almost R25 million from an Eskom supplier, which was appointed to transport raw material and water from Kendal power station to Kusile power station.
- The Special Investigating Unit (SIU) says it has obtained a preservation order to freeze assets of a former Eskom manager, her husband and their two children. EWN
- The World Bank Group has approved a loan request for US$497 million for a project to decommission and repurpose the Komati coal-fired power plant.
- The plan is to instead repurpose the plant for the use renewable energy and batteries.
- The lifespan of the plant in Mpumalanga came to an end on Monday after being in operation since 1961.
- The loan has now been approved by the group’s board, a key step towards converting the plant into a renewable generation site, also adding to the country’s ailing power grid. IOL
- Public service workers say the cost of living is unbearable as they prepare for a massive strike over wages.
- The sector is disgruntled after government refused to budge from its offer of a 3% wage increase.
- Workers want increases in line with inflation.
- Public sector workers outside the Johannesburg prison have hit out at government’s response to their pleas for higher wages.
- The picket outside the prison gates is a part of the build-up to a massive strike across the country on Thursday. EWN
- US stock futures were little changed on Thursday as investors look ahead to the October inflation report, while closely monitoring midterm election results.
- Futures contracts tied to the three major indexes were all trading near breakeven.
- Yesterday, the Dow fell 1.95%, the S&P 500 dropped 2.08% and the Nasdaq Composite tumbled 2.48%, with US stocks snapping a three-day advance.
- Those moves came as the midterm elections proved more competitive than anticipated, as the market had hoped for a landslide win for Republicans, creating a gridlock in Washington.
- Investors now turn their focus to the US CPI report for hints on how further the Federal Reserve may tighten financial conditions to cool an overheating economy.
- The US 10-year Treasury yield, trade below 4.1%, as investors awaited the outcome of congressional midterm elections and inflation data due to be released later in the week.
- A split government, with Republicans winning the House of Representatives and possibly the Senate, could result in political gridlock that hampers significant reforms while boosting risk appetite.
- On the monetary side, the Federal Reserve delivered a widely expected 75 bps hike last week while flagging a longer monetary tightening path as the central bank seeks to bring down inflation to its 2% target.
- While recent data showed that the job market remains extremely tight, now, all eyes turn to October inflation data, due on Thursday, for more clues on future interest rate hikes.
- The Dow fell 646 to 32,513
- The SP500 fell 79 to 3,748
- The Nasdaq fell 263 to 10,616
- Asian markets lower following a sharp decline on Wall street.
- In Japan, the Nikkei 225 dropped 0.97% to close at 27,446, sliding for the second straight session and tracking losses on Wall Street overnight.
- The hotly contested US midterm elections.
- Investors also braced for US inflation data due on Thursday that could influence the Federal Reserve’s next policy move. Nearly all sectors declined.
- In Australia, the ASX 200 fell 0.5% to 6,964 tracking losses on Wall Street overnight, with technology and resource-related stocks leading the declines.
- Xero led the tech sector lower, tumbling 10.9% after reporting a huge first half loss and announcing the replacement of its CEO.
- Heavyweight miners, gold stocks and clean energy-related names also slumped such as BHP Group (-1.5%).
- Elsewhere, energy firms declined on weaker oil and coal prices, with sector leaders Woodside Energy and Whitehaven Coal losing 2.3% and 3.3%, respectively.
- The US dollar index steadied above 110, with traders looking ahead to a key US inflation report.
- Traders also constantly tracking midterm election results.
- The midterm elections proved more competitive than anticipated, as the market had hoped for a landslide win for Republicans that would create a gridlock in Washington.
- Investors now turn their focus to the October CPI report due later in the day that could influence the Federal Reserve’s next policy move.
- Markets are currently priced for a more moderate half percentage point Fed rate hike next month,
- but a hotter-than-anticipated inflation report could fuel bets for another supersized 75 basis point increase. FX news
- Crude oil, Brent crude trading below $93/bl on Thursday after losing 6% in the past three sessions.
- Prices pressured by a larger-than-expected build in US crude inventories and China’s ongoing battle against resurgent Covid outbreaks.
- Official data showed that US crude stockpiles rose by 3.93 million barrels last week, higher than forecasts for a 1.36 million barrel build.
- Uncertainty around China’s outlook added to fears that an aggressive tightening campaign by central banks in developed economies will drag the world into a recession.
- In America
- WTI crude futures held below $86 /bl on Thursday after losing more than 7% in the past three sessions. Gulf Energy news
- Gold prices solid above $1,710 /oz, hovering near a one-month high hit in the previous session.
- Traders waiting for the US inflation report that could signal the size of the Federal Reserve’s interest rate hike in December.
- Analysts observed that the market seemed positioned for softer data, and warned that recent months have produced upside surprises.
- Markets are currently priced for a more moderate half percentage point Fed rate hike next month.
- However, a hotter-than-anticipated inflation report could fuel bets for another supersized 75 basis point increase.
- While gold is widely considered as a hedge against inflation and economic uncertainties, higher interest rates raise the opportunity cost of holding non-yielding bullion, denting its appeal. Kitco metals
- Bitcoin US Dollar traded at 16726 this Thursday November 10th.
- The FT reporting that the Crypto winter risks turning into ice age
- ‘Apathy’ kicks in as asset class fails to pick up after this year’s market crash.
- The ongoing crypto winter is “only going to get worse” as the industry recalibrates to a higher interest rate world,
- This was according to the co-founder of blockchain platform Tezos.
- Higher interest rates were being blamed for the sharp drop, but analysts conclude, that
- Even if the Fed pauses rate hikes next year, only the “small minority” of crypto applications that are truly useful and can organically grow users will thrive. Financial Times