It has been a challenging week, especially in the equities space, and what everyone needs is a long weekend.? Thankfully tomorrow’s public holiday provides us with exactly that and we can take stock again of where the market is on Monday morning.?
These are the mid rates at 5:50 today:
Brent Crude = $78.63 per barrel
- It looked like the Rand would continue to recoup some of Monday’s losses yesterday but after a brief jump to R18.27 to the Dollar we then fell back again to close the day at R18.39, barely stronger than where we opened at R18.42.?
- In the absence of any market moving headlines yesterday there’s very little to report.? The Dollar Index pretty much drifted sideways, equities in Asia and Europe continued their recovery but while US stocks opened in the green they later fell back and closed slightly lower last night which has set up another uncertain day today.? There was no US data and no FED speakers so the currency market seems to be treading water ahead of today’s initial jobless claims report which is the last data point capable of moving the dial this week.? Given the lack of any direction the Rand remained range bound yesterday which isn’t too bad if you consider all the uncertainty still swirling around.? ??
- Following Monday’s dramatic selloff it does feel like the market is a little more accepting of Friday’s US jobs report which was the primary catalyst for this bout of risk-off sentiment.? The following is from Reuters:? Traders ramped up their bets on FED rate cuts on Monday following an unexpected jump in the unemployment rate on Friday, at one point pricing in more than 125 basis points of reductions this year. Those bets have gradually come down, and traders on Wednesday were expecting 100 bps of easing this year and a 62% chance of a 50 basis point cut in September, having priced it as a near certainty on Monday. “I think you start to see people saying, hey, let's go more and more through the details of what's going on in the labour market, and really come to the conclusion that things are really not falling apart lightning quick in the United States," said Stephen Miran, senior strategist at Hudson Bay Capital.
- The US Volatility Index (VIX) had enjoyed an extended period in and around 12 points for most of this year thanks to the prevailing calm across the market but on Monday it spiked to almost 40 points which is its highest level since COVID struck in early 2020.? With the market’s concerns easing somewhat the VIX is now down to 27 points which is still quite high compared to the past 18 months and that means today’s jobless claims report has the potential to cause problems for the Rand while nerves are still on edge.? Last week’s claims report was forecast to come in at 235?000 but 249?000 was the number, comfortably above expectations part of the reason why the market started questioning the health of the US labour market.? Today’s report is forecast to show 240?000 new claims and anything higher than this could spell trouble for the Rand once again.?
- Local market data today sees our June manufacturing production stats at 1pm which should be encouraging thanks to the “end” of loadshedding, and then at 2:30pm we get the US jobless claims report. ?
- Possible USD mid rate trading ranges in the Rand today are R18.20 and R18.50
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7 个月It’s been quite a rollercoaster this week! A long weekend is definitely well-timed for a breather and to reassess our strategies. It’s a great chance to step back, recharge, and come back with a fresh perspective. For those in the equities space, a bit of downtime can be invaluable for regrouping and planning ahead. Looking forward to seeing how things shape up when the markets open again. Enjoy the break, everyone!