The ZAR drifted weaker on the back of a recovering Dollar and rising US yields.
Significant data this week;
- Expect a weaker ZAR ahead of Wednesday’s Fed minutes.
- The Dollar finding support on the back of the jump in US yields, following comments by a host of Fed governors.
- Importers are encouraged to take advantage of current levels and cover commitments.
- As we expect a weaker ZAR heading into Wednesday.
- NB: The likelihood of a break through 16.000 highly unlikely after the strong ZAR run.
- A move towards 16.4000 remains on the cards.
- USDZAR : Expect a range 16.0900 – 16.3500
- Importers 16.1700-16.0900
- Exporters 16.3000-16.3500
- EURZAR : Expect a range of 16.4600 – 16.7500
- Importers 16.5700-16.4600
- Exporters 16.6800-16.7500
- GBPZAR : Expect a range of 19.5800 – 19.8500
- Importers 19.6300-19.5800
- Exporters 19.7300-19.8500
- USDZAR 16.2600
- EURZAR 16.6500
- GBPZAR 19.7000
- In a Risk to SA financial markets, SA Finance Minister Enoch Godongwana is yet to be charged after a case of sexual assault was opened.
- At the weekend, Mpumalanga police confirmed that a case had been opened against a prominent person.
- Skukuza Police Station confirmed a criminal complaint was laid by a hotel employee.
- The woman, who works at the Kruger National Park, has accused Godongwana of violating her while on holiday with his wife. EWN
- South Africa will have an infrastructure investment gap of R4.8 trillion by 2030.
- The numbers are based on the aspirational target in the National Development Plan (NDP), and will likely happen unless the country increases its investment in infrastructure.
- This is according to Dr Hurbert Joynt, programme manager for Infrastructure South Africa’s Centre for Excellence.
- He reiterated that the aspirational target in the NDP is for gross fixed capital formation to comprise 30% of GDP by 2030. Moneyweb
- Striking employees of the South African Revenue Service (SARS) have returned to work.
- The announcement came after unions suspended their industrial action, against the revenue collector .
- Although employees have returned to work, the parties have not yet reached an agreement meaning that unions and SARS will have to return tp the negotiating table.
- “The suspension of the industrial action affords all parties the opportunity to work towards progressing the negotiations and related discussions towards settling the dispute,” said SARS in its statement. Moneyweb .
- After a strong end to last week, with stocks rallying strongly after the softer than expected inflation data.
- The SP500 reaching 4186. The broader market index up 17% off the lows reached in June (3635).
- The market of the opinion the FED will have to slow down as the economy contracts.
- In addition, there are no signs of a shrinkage of the FED’s balance sheet , if any it continues to grow, resulting in QE conditions that will continue to support risk assets.
- This morning stocks futures mixed in Asia, US futures (lower) on the back of profit taking, but Asian equities ( lagging ) remain well bid on the back of easing inflationary conditions in the USA.
- The US 10-year note consolidated around the 2.90% level, a level not seen in three weeks.
- Traders continue to bet that the Federal Reserve will go ahead with its aggressive tightening plan despite signs of cooling inflation.
- SF Fed President Mary Daly, said that while she sees a 50 bps rate hike in September as appropriate, she left the door open for a sharpest move to tame sky-high inflation.
- Market moves came despite softer-than-expected US headline inflation and the first decline in producer prices in more than two years.
- The Fed continues to want to front load the hiking cycle to combat inflation resulting in a severe inversion of the 2 v 10’s, that is traditionally a good indicator of a recession.
- The Dow added 424 to 33,761
- The SP500 gained 72 to 4,280
- The Nasdaq added 267 to 13,047
- image : Trading economics