Markets Update with TreasuryONE

EM’s trading softer Emerging markets currencies have been under pressure during the course of the day, with global recession fears and hawkish Fed commentary weighing down risky assets. The Rand has lost 1% during the day, trading as weak as R17.30 at a stage but slightly stronger at R17.27 now. The Rand continues to trade weaker than most of its EM peers, with local headwinds keeping the Rand fro...

Weaker US Data, softer dollar Softer US data has seen the dollar trading on the back foot this afternoon, with markets favoring riskier assets. US PPI printed at 6.2% y-o-y, versus the 6.8% expectation, while retail sales declined 1.1% in December against the 0.8% decline which was expected. We have seen the dollar trade softer against its major peers, with the euro and pound currently trading at...

Emerging markets are performing relatively well, but the rand is not following. Normally as the rand is a very liquid EM currency and benefits from risk-on rallies, the only explanation for the underperformance is the current ongoing electricity crisis we are facing. We will need to keep an eye on this. If the risk-on rally in other emerging markets stalls, the rand could be in for further pain. A...

The Rand is under pressure today due to the lack of liquidity, the US being out of the market, and the protests that we have seen across the country are placing pressure on the local unit. The rest of the emerging market space has also been under pressure, but the rand is leading the way as load-shedding and the cost to the economy is worrying investors. We have seen President Ramaphosa cancel his...

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SA GDP The local economy grew by 1.6% quarter-on-quarter in Q3 of 2022. After the negative growth in Q2 of 2022, partly due to the floods in KZN in April, means that South Africa avoided a technical recession. This is all upbeat for now, but the South African economy is still not growing at a pace fast enough to create more jobs. Markets barely reacted to the print as the rand remained within a 10...

US dollar on the back foot The US dollar is currently within reach of the 1.0600 level against the Euro. It has erased more than half the year's gains in the past couple of weeks, as the market is betting that the US Fed will temper its aggressive stance on hiking interest rates and the current speculation of the reopening of China. The currency "risk-on" sentiment, coupled with news over the week...

A different kind a of Ramaphoria The Phala Phala headlines and rumors surrounding the possible resignation of President Ramaphosa are still keeping the rand under pressure. The rand posted another wide trading session of R17.26 - R17.60, closing the week slightly below the R17.50 handle. Looking at where the dollar is trading against other currencies, one could easily argue a case of levels closer...

Rand under pressure We have seen the Rand almost lose One Rand today, with the Rand trading between R17.0700 and R17.9500. The massive range was due to the rumors in the market about President Ramaphosa and his possible announcement of resigning following the Phala Phala report. The market has not taken kindly to the news, and we have seen the Rand on the back foot and massive volatility due to th...

EM’s on the front foot The rand is enjoying the last few trading sessions, and today has not been any different. After spending most of the day in a narrow range, the rand is looking to make a break below R16.90. The rand last saw a close below R16.90 back in August this year, with the stronger dollar keeping the local currency on the back foot since. Earlier today, our Trade Balance came out a ne...

News from China helps risky assets We saw earlier this morning that while the Chinese government is sticking to its zero-Covid policy, some of the measures have been relaxed as a result of the protests in China. Lockdowns to suppress the spread of the virus should be lifted “as quickly as possible” following outbreaks, said health officials at a National Health Commission press briefing in Beijing...

The softer dollar was the central theme for the morning as the dollar lost ground against other major currencies. The euro firmed to just below 1.05, the pound traded above 1.21, and we see the Yen currently up 0.37% against the greenback. The rand, however hovered in a relatively tight range for most of the day as it bounced around between R17.08 to R17.16, not benefiting too much from the dollar...

Dollar rally The dollar has given up some substantial ground in the past 3 weeks. This has helped along the risk-on rally we have witnessed and supported our local currency. The rally in USD/ZAR has been around R1.50 in the past 3 weeks. The dollar index is now running into substantial support at the 200-day moving average. We think this support will hold for now and that there can be a bit of a c...

SARB hikes 75bps As widely expected, the SARB hiked by 75bps, although the vote under the members was only 3-2 in favour of the 75bps hike. Inflation is expected to be back within the 3% to 6% target band in 2023. We can see another 50bps hike in January from the SARB and then a pause the hiking cycle. It will also depend on what the Federal Reserve does in Dec.  Dollar under pressure The dol...

The rand traded at its best levels against the dollar since the end of August after breaking below the R17.10 handle late afternoon. The reasoning behind it could be argued that some global risk-on is happening in the markets, with EM’s across the board trading on the front foot. Another cause might be that the gambling man is betting on the SARB to raise rates by more than the expected 75bps tomo...

It was a lackluster day in the market today , with most currencies trading in very narrow ranges. The rand traded in a 10cent range for most of the day , touching a high of R17.35 in the morning trading session but has found a comfortable level at R17.30, where it is currently trading. The sideways action has been seen throughout the market, with all the currencies having a very slow day.  Th...

This morning's main headline is the rise in COVID cases in China, which has surely halted the opening of the Chinese economy. This latest kick in the teeth has sent a fresh bout of "risk-off" sentiment through the market, and we saw a stronger US dollar in early morning trade. The US dollar fought back to trade below 1.0250 against the Euro, and with that, we saw EM currencies under pressure this...

Over the last two trading sessions, we saw the mighty dollar fall off its horse, but some resilience for the greenback returned as we move into the US midterm elections and October CPI print on Thursday. During the course of the day, we saw currencies across the board slowly softened against the dollar, as the euro dipped back below parity and the rand tested close to R17.88. However, later aftern...

The momentum that Em markets enjoyed on Friday seemed to have outweighed the China zero-Covid talk of this morning. We did see the Rand move all the way back above the R18.00 mark in early morning trade, but with the US dollar moving towards parity against the Eur, we did see the Rand respond in kind. The Rand is within sight of the R17.70 level and is currently trading at R17.7250. The move in th...

The market was driven mainly by a stronger dollar after the FOMC meeting last night. The Rand, EM’s and equities did not fare well as the target rate by the Fed was effectively moved higher, and we saw the rand down 1.3% at a stage. After trading above R18.50, we have seen some consolation in the market and the rand is trading in the mid R18.30’s. The pound fell into more difficulties after the Bo...

Markets have been a bit choppy in today’s trading session as we draw closer to the FOMC rate announcement tomorrow evening. During the course of the day, we saw the rand trading stronger as the dollar softened across the board, but better-than-expected PMI data quickly reversed those gains. October PMI data showed a more robust manufacturing index than what was expected by markets, coming in at 50...

The European Central bank hiked interest rates by 75bps as widely expected by the market. The EUR/USD was trading up close to 1.01 before the rate announcement but has since fallen back below parity. Comments from Christine Lagarde that the Eurozone's economy will worsen have caused the market to scale back on more aggressive rate hikes from the ECB.  US real GDP growth US real GDP growth for...

With the US dollar trading above parity against Euro, we have seen markets turning "risk-on" before the ECB meeting tomorrow. We have also seen Gold trading higher, which in conjunction with the weaker US dollar, has helped EM currencies today. The Rand has flirted with breaking below the R18.00 level, and it seems that there is some momentum in the short term that could see us testing the R17.90...

Tale of Two halves The day started off with EM markets under pressure, with the Rand and other EM currencies firmly on the back foot, with the after-shocks from yesterday still firmly in the market. The Rand pushed the R18.50 level in midday trading and looked odds-on to trade above the R18.50 level. However, in late afternoon trade, we have seen the Pound on the charge after the announcement of t...

The Rand and other EMs have fallen under pressure this afternoon, creating wide ranges for the Rand across the board. With the euro and pound still holding firm against the dollar, we have seen the euro trading at its highest level against the Rand, touching R18.20, while the pound is trading at R20.80. The Rand has reversed all the gains from Friday evening as slightly dovish commentary by Fed sp...