Good morning, | |||||||||||||||||||||||||||||||||||||||||||||||||||||
On the wires… | |||||||||||||||||||||||||||||||||||||||||||||||||||||
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Quote of the day | |||||||||||||||||||||||||||||||||||||||||||||||||||||
“We are on a high level, and everyone knows that when you play South Africa, it won’t be easy anymore” – Hugo Broos | |||||||||||||||||||||||||||||||||||||||||||||||||||||
The indicators | |||||||||||||||||||||||||||||||||||||||||||||||||||||
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Currency crackdown… | |||||||||||||||||||||||||||||||||||||||||||||||||||||
The rand has held onto its horses after almost slipping into 16.70 territory yesterday, opening up firmer this morning. Markets seem to have positioned themselves carefully for the host of American data due today, which will give us an idea of where their inflation (and subsequently interest rates) is headed. One would expect a choppy day of trading, with caution the name of the game. Caution does not suit the risky South African asset, but we could see a big push downwards if US data comes out in our favour.
From our side, the local PPI release will be important after the sharp rise in producer inflation last month, especially with fuel and petroleum-related costs still feeding into the numbers. While expensive petrol is less than ideal for us as the consumer, a hotter print could give the rand some support by keeping SARB rate-cut expectations in check. On the contrary, a softer number would probably leave ZAR more exposed to global factors. The biggest driver is still more likely to come from the US, where inflation and other key data will move the dollar depending on whether it strengthens or weakens the case for tighter Fed policy.
It is shaping up to be a significant session for the rand and should set us in a range for the next month or so – With things seemingly calming down on the geopolitical front (Touch wood). If my headline, quote or fact didn’t give it away, Bafana Bafana scraping through the group stages with a negative goal difference has me incredibly excited. Let’s hope the currency can follow suit on a big day! | |||||||||||||||||||||||||||||||||||||||||||||||||||||
On the radar… | |||||||||||||||||||||||||||||||||||||||||||||||||||||
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Did you know? | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Yesterday was the first time that Bafana Bafana have qualified for the World Cup knockout stages. | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Kind regards Kyle Moulster |
