Tuesday, 15 October 2013

US close to averting debt ceiling crisis

Trade report 15/10/2013

ZAR outlook

USD/ZAR expected range: 9.8200 – 9.9600


The US Senate is close to confirming a deal which will reopen the government and avert the immediate debt ceiling crisis.  This news has allowed the USD to open the day slightly stronger although trading volumes are still very low.  The ZAR was trading at R9.9230/$ in early morning trading after closing at R9.9150/$ yesterday in New York.

Local news

The markets continue to be driven by the US government shutdown and debt ceiling issue, although once the crisis is over the ZAR remains one of the more vulnerable EM currencies due to its current account deficit of nearly 6% of GDP.

International news
 
The US cannot afford any more delays in the budget crisis and the deal that US politicians are hoping to agree on will reopen the government until January and raise the debt ceiling until early February.  Although only a temporary measure it would avoid the risk of a US default and lessen the pressure exerted on the USD in recent weeks.

TODAYS KEY DATA POINTS (GMT):

• 09:30 SA Bond auction (R186 – 900mn; R213 – 900mn; R2037 – 550mn)
• 08:30 GB PPI output core y/y n.s.a
• 08:30 GB CPI y/y
• 12:30 US Empire manufacturing
• 14:00 US Fed’s Dudley speaks


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