Thursday 29 August 2013

Rand volatile over Syrian saga

Trade report 29/08/2013

ZAR outlook

USD/ZAR expected range: 10.2400 – 10.4000

Yesterday was a quieter day on the markets with the ZAR rallying slightly and closing around 10.40 to the dollar after it’s drop to 10.51 earlier in the day. No-one is quite sure what to expect from the developing Syrian saga and the leaves all EM’s on the backfoot in a volatile market.

Local news

The ZAR continues to battle negative sentiment with investors as strike season locally is in full swing. Strikes in the automobile, construction and transport sectors continue, and now the petrol station and car dealership workers are also set to start striking from Monday. The SA National Union of mineworkers has not reached an agreement over wages with gold producers, increasing the likelihood of a miners walkout as well.

International news

The threat of Western military action in Syria has increased which has all EM’s under pressure as investors are jittery about instability in the area. This conflict in the Middle East dominates risk sentiment for the moment. Also to note is that US data being released today over jobless claims and GDP will indicate whether talks over QE tapering increase or not.

TODAYS KEY DATA POINTS:

• 7am: SA earnings (IMP, HYP, MTA), Europe earnings (Carrefour, WPP, L’Oreal, etc)
• 11.30am: SA July PPI (+0.5% m/m)
• 2.30pm: US initial jobless (332k), cont claims (2.988m), Q2 2nd read (+2.2% annlsd – revised from 1.7%)

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