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Daily Dose

19 November 2019

Happy Friday,


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On The Wires,

International:

  • Hunter eats wild rabbit, gets bubonic plague
  • Iraqi spy chief warns ISIS is rebuilding
  • Bridge collapse in France leaves two dead and several injured
  • Saudi Arabia puts $1.7 trillion price tag on its oil monopoly
  • Dutch football match halted after 'Black Pete' chants

Local:

  • The Lucky Duck turns 21!
  • Public Protector probes King Goodwill Zwelithini’s failed cultural village
  • Double life sentence for cop who killed ex-girlfriend and her new partner
  • Former beggar's kind act to help motorist whose car broke down lands him a job
  • Stormers coach John Dobson has confirmed that Siya Kolisi will lead the team

Two Cents Worth…

Currency Crackdown

Thanks to Nyiko,

The rand is unchanged against the dollar this morning from yesterday’s close of 14.81, with traders cautious as doubts over a trade deal being reached between China and the US rise and ahead of the SARB’s rate decision tomorrow. The currency stuck to a relatively narrow range between 14.69/$ and 14.83/$ after opening at 14.71/$ and gradually weakening as he day went by. Reports have circulated that Chinese officials are pessimistic about a trade deal and troubling comments from Donald Trump that he did not agree on cancelling tariffs. Markets had expected a deal to be signed in the near future, with both sides signalling a deal was close, but it seems like there are still a lot more issues to iron out before that. At this rate, we’re unlikely to see a deal reach before December 15, when the next round of US tariffs on Chinese good is set to take effect.

Locally, investors will be looking to see if the SARB takes direction from other central banks and cut interest rates on the back of ongoing trade tensions and slowing growth when the committee concludes its meeting on Thursday. A stable inflation rate and weak local could growth should provide the central bank with enough ammo to make a cut, however with a looming credit decision the bank may choose to take a conservative approach and keep rates unchanged. Economists polled by Reuters believe as much, with 21 out of 28 expecting an unchanged rate and only 7 expecting a 25 basis point cut. Meanwhile Eskom has taken a major step forward in their restructuring plans following the appointment of Nampak CEO Andre de Ruyter as permanent group CEO. The appointment has been met with surprise but has been generally met with approval from most political parties and business leaders. Meanwhile, the SAA strike continues today, with Numsa members looking to rope in non-striking workers at the Civil Aviation Authority, Mango Airlines, SAfair, SA Express, Airports Company SA for some support.

On the global front, the dollar is mostly unchanged against its peers on the back of trade uncertainty and ahead of the minutes from the Fed’s last meeting. The euro is mostly flat, with markets looking to the first major speech by new ECB President Christine Lagarde on Friday. The pound is also unchanged this morning after rising 0.4% yesterday on news that all Conservative Party candidates for the December 12 election have pledged to back Prime Minister Boris Johnson’s Brexit deal.

In other markets, Asian stocks were mixed despite a positive close in the US. Oil prices are lower on trade jitters, while gold has edged up. US Treasuries are stronger this morning while the local R186 bond is weaker. Emerging market currency are mixed to flat against the dollar, with the dollar index marginally lower.

What to look out for today?

  • EU – Construction Output
  • US – Fed Williams Speech

Did you know?

Dogs are "prosocial," meaning they volunteer to share with and help others, even when they may not benefit from it directly.

Have a good day,

Bongani

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