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Daily Dose

21 October 2019

Good morning,


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On The Wires,

International:

  • Twenty dead on DRC bus accident
  • Four killed as police fire on Bangladesh protesters
  • Brexit deal rejected by UK parliament
  • Mozambique elections show big win for ruling party as opposition parties reject results
  • All Blacks and England are the bookie favourites for the WC rugby title

Local:

  • DA bring back Zille- Mashaba calls press conference
  • Gauteng biker caught at 144km/ h in 60 zone
  • 6000 patients waiting to undergo surgery in Gauteng hospitals
  • First talk of day 0 for Gauteng
  • Boks march on to face wales in rugby WC semi- finals

Two Cents Worth

Well done to the Boks, who come out on top (as they should have) against a Japanese team who showed guts, passion and brevity. The Japanese rugby team is a proud example of what every rugby team in the world aspires to be!! Their playing style, speed and commitment was brilliant to watch and was refreshing in an era where kicking territorial advantage has become the way of things.

Currency Crackdown

On Friday, the rand market traded in a narrow range with everybody’s attention on Eskom’s see saw announcements and the developments around Brexit. The trading range for the day was 14.85 to 14.75, with the close at the 14.80 level. The markets are opening pretty quiet this morning, with everybody waiting for directional news which could come from the trade talks, geopolitical developments or economic releases, which are light. Locally, Eskom remains a mystery while the medium- term budget statement and Moody’s review draws nearer.

Other indicators are as quiet: The $ is weaker against the Euro as well as lower against the index, which leaves gold slightly higher, while Brent is marginally lower. The 10 -year US Treasury yield is higher, even though the US leading index was lower than expected on Friday, which supports the cause for lower rates. The local bond yield is almost unchanged and is treading water looking for direction. US equity markets were lower while Asian markets are mixed. No direction from any of the lead indicators this morning. GBP slipped against all currencies but remains at elevated levels, as the Brexit deal was rejected on Saturday. GBP volatility will continue as we head for the Brexit deadline.

The rand seems range bound for now but we know there are some big local hitters at the end of the month being medium term budget statement ( been moved forward to October 29) and then the much -debated Moody’ review. Eskom seems to drive local sentiment but the rand seems to be reacting to international developments, which favour yield. I expect some market trepidation to kick in prior to the above events, so trade with caution and go with the ranges.

What to look out for today?

  • EUR- German PPI
  • USD- Federal budget balance

Did you know?

The Japanese have such a low birth rate that there are more adult diapers sold than baby diapers.

Have a good week,

Wayne

 

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