On the wires…

• Hong Kong apartment fire death toll rises to 146
• Trump says Venezuelan airspace should be considered closed
• SAfm broadcaster arrested for allegedly recruiting SA’s for the Russian military
• SA closes its airspace to flights carrying Palestinians fleeing Gaza
• F1: Verstappen wins in Qatar to ensure three- way showdown
• Boks crush Wales, Eben spoils the celebration

Quote of the day

“Impossible is a word to be found only in the dictionary of fools.” ― Napoleon Bonaparte

 The indicators

Currency crackdown…

On Friday, the rand made some ground against the $ which had softened during the Thanksgiving holiday. It traded in a 17.09- 17.19 range in reportedly subdued trading. Besides the slightly weaker $ on the day, improved SA economic releases assisted the rand. It must be mentioned that the release that missed was the trade surplus, which missed expectations, with the surplus was lower than anticipated. The continued $ weakness is still being attributed to increasing chances of a rate cut this month. From last week’s 80% probability, it has moved to 87% probability for a 0.25% cut. Assisting this move is an opinion that the next potential Fed Chair Hasset’s history is one of preferring lowest interest rate policy.

Indicators: As mentioned, the $ is slightly weaker again- against the broader index and other majors. Trading activity is still reported as quiet, as the US will be back at work this afternoon. Brent is unchanged, while gold has moved nicely higher again. US equity markets were in the green again on Friday, in a shortened session. This morning, Asian markets are mixed, with Japan taking strain off the back of a rumoured potential increase in interest rates. Equity market futures are all in the red, so some risk aversion is in the mix. The big story developing is the repeated correction lower of the crypto markets, with Bitcoin taking a decent smack through the weekend. Technical analysts have called a support level at the $85 000 mark, so it will be interesting to see who heads for the exits if it trades below that level. Risk off sentiment has raised its head, and the rand users need to be aware that is not the plain sailing we have seen over the last couple of sessions.

As we head deeper into December, liquidity will be tested. We have a myriad of economic data due (including local SA GDP and Moody’s review), so international currency, equity and metal markers will all react. The Eurozone economic data has not been great either which does question current ECB policy. The GBP has not escaped either, with their budget indicating the highest tax burden since WW2. In these circumstances, the rand has made gains across the board, but that data has been released and today is a new week. We will need to keep an eye on risk sentiment and the $ to pick a level for the rand into the end of the year. It has struggled at the 17.10 level, and we would need to see a break lower soon, or we might need to return to higher levels first. An immediate trading range of 17.00- 17.30 should prevail.

On the radar…

Did you know?

Antarctica recorded the lowest temperature ever at -89.2 degrees Celsius in July 1983.