RDG BROKERS » economic

JSE up in thin volumes

RDG Brokers — Mon, 16 Aug 2010 23:26:58 +0000

JSE up in thin volumes

Aug 16 2010

Johannesburg – The JSE ended slightly firmer on Monday, with light total volumes and low total value traded underscoring nervousness among investors who remain on the sidelines due to heightened global economic uncertainty.

At its close the JSE all share index added 0.21%, with resources gaining 0.32% and gold miners climbing 0.64%. But platinum miners fell 1.10%. Banks rose 0.85% and industrials eked out 0.11% gain, and financials were 0.17% higher.

The rand was bid at 7.26 to the dollar from 7.31 at the JSE’s close on Friday. Gold was quoted at $1 224.80 a troy ounce from $1 212.28/oz at the JSE’s previous close, while platinum was at $1 532.00/oz from $1 520.50/oz before.

Mpho Mojalefa, a trader at BJM Client Services, said low value traded and light volumes indicated that investors were not prepared to commit themselves amid lack of direction.

Mojalefa said foreigners were buying US bonds, spreads were widening in Europe and gold price was higher, underlining uncertainty about the global economic recovery. “The US manufacturing data came below expectations,” he said.

Earlier, Japan reported downbeat economic data that raised concerns about the global economic recovery.

Dow Jones Newswires reported that US stocks fell early on Monday after weaker-than-expected reports on New York-area manufacturing and Japan’s gross domestic product fuelled concerns over slowing global growth.

The Dow Jones Industrial Average shed 55 points in early trading as investors flocked to safer havens.

The price of gold rose to its highest level in six weeks, while the yield on the benchmark 10-year Treasury note fell to its lowest level in more than a year.

- I-Net Bridge

Article from Fin24

Positive Outlook

RDG Brokers — Fri, 06 Nov 2009 07:26:29 +0000

South Africa’s rand held onto gains and is slightly stronger this morning. Most emerging market currencies are benefiting from a positive global economic outlook. Trading should be quiet ahead of the release of U.S. jobs data this afternoon. While the euro, gold and other commodities remain well supported the rand will remain strong. The U.S. dollar held steady on Friday with investors consolidating positions ahead of October non-farm payrolls data due later in the session, a report that would highlight the durability of an economic recovery. A Reuters poll showed median forecasts are for 175,000 jobs being shed, slower than the 263,000 lost in September, with the jobless rate rising to 9.9 percent. If the numbers disappoint, investors are likely to flock to the U.S dollar and the yen JPY=, while a strong report could see high-yielding currencies gain.
Current levels
Rand / Usd	7.5900-7.6400
Rand / Euro	11.2800-11.3300
Rand / Sterling	12.6000-12.6500
Jpy / Rand	11.90 -11.95
Jpy / Usd	90.645
Usd / Euro	1.4875
Gbp / Usd	1.6620
Gold	$1 091.00
Brent	$78.63
Expected ranges
Rand / Usd	7.53000-7.7300
Rand / Euro	11.2000-11.4000
Rand / Sterling	12.5000-12.7000
Jpy / Rand	11.85-12.05

Budget Tomorrow

RDG Brokers — Mon, 26 Oct 2009 09:18:02 +0000

South Africa’s rand remained in a 7.40/$ to 7.50/$ trading range on Friday. We do not expect too much action today as we have quite a busy week on the economic front. Locally we have the mini budget tomorrow and the release of inflation figures later in the week. The U.S. 3RD quarter GDP will also be released later this week. Markets should remain relatively quiet until all economic data has been analyzed by market participants. The dollar fell to a 14-month low against the euro on Monday as a Chinese report saying Beijing should increase its holdings of euros and yen in its foreign reserves led investors to sell the greenback. The yen also got a boost from the opinion piece in the Financial News, a paper published by the People’s Bank of China, which said that the dollar should remain the principal currency in China’s foreign exchange reserves but that the share of Euros and yen should increase. The Australian dollar also benefited from the article as investors believe the Aussie has been included in the currencies that China and other central banks have bought to diversify foreign reserves. “The comments from China are pretty strong and that is supporting the euro,” said Tony Bieber, forex analyst at Suncorp.
Current levels
Rand / Usd	7.4300-7.4800
Rand / Euro	11.2000-11.2500
Rand / Sterling	12.1500-12.2000
Jpy / Rand	12.28 -12.33
Jpy / Usd	91.80
Usd / Euro	1.5043
Gbp / Usd	1.6310
Gold	$1 055.00
Brent	$78.44
Expected ranges
Rand / Usd	7.3500-7.5500
Rand / Euro	11.1500-11.3500
Rand / Sterling	12.1000-12.3000
Jpy / Rand	12.20-12.40

Investors cash In

RDG Brokers — Wed, 21 Oct 2009 16:24:55 +0000

We saw profit taking across the board as traders bought back short dollar positions on local and international currency markets. The rand gave back some of its gains versus the European currencies as well. Traders will close long rand positions ahead of the MPC rate announcement even though the general consensus is for rates to remain unchanged. Looking forward we have the mini budget coming up which could have an impact on the currency markets. The dollar stabilised on Wednesday, aided by profit-booking in rallying commodity-linked and higher-yielding currencies, after being pushed to a 14-month low against a basket of currencies the previous day. Traders said investors had been cashing in gains in the Canadian and New Zealand dollars, which hit their strongest levels in about 15 months this month, and in sterling, pushing them down about 0.2 percent against the greenback. The move helped the dollar climb further off a 14-month low against the euro after the single European currency failed to breach a psychological barrier at $1.50 the previous day. The dollar also got some support from profit-taking in Asian currencies, after markets in Brazil fell on a new government tax on foreign investments aimed at stopping the real from gaining. The Bank of Canada killed talk of an early rate hike on Tuesday, warning that favourable economic developments were being undermined by the Canadian dollar’s strength and sending the currency down sharply.
Current levels
Rand / Usd	7.3800-7.4300
Rand / Euro	11.0000-11.0500
Rand / Sterling	12.1000-12.1500
Jpy / Rand	12.20 -12.25
Jpy / Usd	90.68
Usd / Euro	1.4940
Gbp / Usd	1.6415
Gold	$1 056.00
Brent	$76.95
Expected ranges
Rand / Usd	7.3000-7.5000
Rand / Euro	10.9500-11.1500
Rand / Sterling	12.0000-12.2000
Jpy / Rand	12.15-12.35

Watch the interest rates!!

RDG Brokers — Wed, 07 Oct 2009 09:47:07 +0000

South Africa’s rand continued to strengthen mainly on the back of positive emerging market sentiment. Higher rates in Australia send out a positive signal that we are entering into a higher interest rate cycle. There are rumours in the local market that MTN and Bharti are in private talks, which has not been denied or confirmed. This is probably the main reason for the rand’s strength. U.S. labor and manufacturing groups urged President Barack Obama on Tuesday to live up to his campaign rhetoric and formally label China a currency manipulator in a Treasury Department report due out next week. But Nicholas Lardy, a China economic policy watcher at the Peterson Institute for International Economics, said he’d be “shocked” if Obama took that step now. Obama faces his second decision on the currency issue in a semi-annual report due to Congress on Oct. 15. During last year’s campaign, Obama criticized then-President George W. Bush for repeatedly failing to label Beijing a currency manipulator, but then made the same decision in his first stab at the issue in April. Obama’s Treasury Department said China’s currency, the renminbi, remained “undervalued,” but Beijing had allowed the currency to rise 16.6 percent in real terms between June 2008 and the end of February 2009.
Current levels
Rand / Usd	7.4000-7.4500
Rand / Euro	10.9000-10.9500
Rand / Sterling	11.7500-11.8000
Jpy / Rand	11.89-11.94
Jpy / Usd	88.44
Usd / Euro	1.4715
Gbp / Usd	1.5915
Gold	$1 041.00
Brent	$69.15
Expected ranges
Rand / Usd	7.3500-7.5500
Rand / Euro	10.8500-11.0500
Rand / Sterling	11.7000-11.9000
Jpy / Rand	11.85-12.05

Volatile Friday

RDG Brokers — Mon, 05 Oct 2009 09:17:15 +0000

South Africa’s rand had once again a volatile session on Friday; the local unit weakened in morning trade however it regained lost ground in late afternoon. The local unit tested 7.80/$ and even though U.S. figures were bad the rand strengthened and closed near the 7.60/$ mark probably due to profit taking. We could see some consolidation and trade a 7.50/$ to 7.80/$ trading range until fresh economic or business factors are released. We have seen big exporter interest around the 7.80/$ mark and importers will cover below 7.60/$. Group of Seven financial ministers and central bank governors will likely discuss the economic and financial developments that are behind recent currency moves at their meeting this weekend, Bank of Japan Governor Masaaki Shirakawa said on Friday. “Compared with the G20, the G7 consists of members that have major financial markets. That’s why it’s easier for the G7 to be a forum for discussing the foreign exchange market, Shirakawa told reporters upon his arrival in Istanbul. Finance ministers and central bank governors from the G7 — the United States, Japan, Germany, France, Britain, Italy and Canada — will meet in Istanbul on Saturday on the sidelines of meetings of the International Monetary Fund and World Bank.
Current levels
Rand / Usd	7.6000-7.6500
Rand / Euro	11.1500-11.2000
Rand / Sterling	12.1500-12.2000
Jpy / Rand	11.75-11.80
Jpy / Usd	89.78
Usd / Euro	1.46430
Gbp / Usd	1.5977
Gold	$1 004.00
Brent	$68.15
Expected ranges
Rand / Usd	7.5500-7.7500
Rand / Euro	11.1000-11.3000
Rand / Sterling	12.1000-12.3000
Jpy / Rand	11.70-11.90

Trading a Little Quiet

RDG Brokers — Mon, 28 Sep 2009 15:45:29 +0000

South Africa’s rand traded sideways over the weekend. The local unit is trading almost unchanged from Friday afternoon. Trading should remain quiet with quite a few companies having financial year end or half year end. Gold is back below $ 1 000 and the euro is also weaker this morning, however we are still experiencing abnormal trading conditions as traders still await the introduction of the proceeds of the MTN/Bharti transaction. While the transaction is still pending fundamentals will be ignored. Restoring economic growth is more of an immediate priority than tackling currency imbalances, French Economy Minister Christine Lagarde said on Sunday. Lagarde told French television that the G20 will be the forum where global currencies are discussed and said the euro must not be made to suffer at the expense of the U.S. dollar and Chinese Yuan. But she added that this was not her most pressing concern.
Current levels
Rand / Usd	7.4500-7.5000
Rand / Euro	10.9000-10.9500
Rand / Sterling	11.8000-11.8500
Jpy / Rand	11.95-12.00
Jpy / Usd	89.35
Usd / Euro	1.4611
Gbp / Usd	1.5830
Gold	$989.00
Brent	$64.60
Expected ranges
Rand / Usd	7.4000-7.6000
Rand / Euro	10.8500-11.0500
Rand / Sterling	11.7500-11.9500
Jpy / Rand	11.90-12.10

Interest rates too reduce?

RDG Brokers — Mon, 21 Sep 2009 08:24:54 +0000

South Africa’s rand weakened over the weekend and is currently trading around the 7.50/$ mark. Main factors causing the rand to weaken were softer European currencies, gold down $20 from recent highs and Cosatu doing their bit and try to block the MTN/Bharti transaction. Traders are also nervous ahead of the MPC announcement tomorrow, the meeting starts today. If Reserve Bank is serious about the strong rand, they will cut rates which will weaken the rand and help with economic growth……so they say? The United States wants the Group of 20 countries to put in place a set of policies that would lead to more sustainable global growth, according to a letter from a senior White House aide. “We should aim to adopt a policy framework to achieve sustainable and balanced growth,” Michael Froman, President Barack Obama’s top G20 adviser, wrote in a letter addressed to his G20 colleagues and obtained by Reuters. The proposal centers on fixing an imbalance in which some countries such as the United States have growth fueled largely by consumer spending while other countries like China have growth driven primarily by exports.
Current levels
Rand / Usd	7.4800-7.5300
Rand / Euro	10.9600-11.0100
Rand / Sterling	12.1000-12.1500
Jpy / Rand	12.26-12.31
Jpy / Usd	92.10
Usd / Euro	1.4665
Gbp / Usd	1.6170
Gold	$1 002
Brent	$70.65
Expected ranges
Rand / Usd	7.4300-7.6300
Rand / Euro	10.9000-11.1000
Rand / Sterling	12.0500-12.2500
Jpy / Rand	12.20-12.40

Inflation Declines

RDG Brokers — Thu, 27 Aug 2009 09:16:48 +0000

South Africa’s rand remained in narrow ranges, after CPI data showed another decline. The local unit is slightly weaker after Chinese markets depreciated causing investor to run for safe haven currencies. The violence seen at the Union Buildings by the defense force workers will not do us any favours and if it wasn’t for the possible MTN/Bharti transaction the local unit would probably be a lot weaker.

U.S. stocks closed near break-even on Wednesday despite fresh signs of a modest economic recovery, while rising U.S. crude stockpiles led oil prices to extend sharp losses from the previous session. News that China would act to restrict redundant investments underscored concerns about the global economy and triggered safe-haven buying of the U.S. dollar. Gold futures ended a tad lower, helped by the dollar’s gains, while copper was little changed, weighed down by Chinese constraints on industrial overcapacity. Investors remained cautious after a decent run-up in equity markets, leaving stocks to edge up on the day even after solid reports on U.S. housing and new orders of durable goods.

Current levels

Rand / Usd
7.8300-7.8800

Rand / Euro
11.1800-11.2300

Rand / Sterling
12.7000-12.7500

Jpy / Rand
11.90-11.95

Jpy / Usd
93.40

Usd / Euro
1.4255

Gbp / Usd
1.6214

Gold
$946.00

Brent
$71.25

Expected ranges

Rand / Usd
7.7500-7.9500

Rand / Euro
11.1000-11.3000

Rand / Sterling
12.6500-12.8500

Jpy / Rand
11.80-12.00

Positive corporate Results

RDG Brokers — Wed, 26 Aug 2009 09:59:53 +0000

South Africa’s rand traded in narrow ranges yesterday, as market players were sidelined waiting for fresh economic indicators. We have CPI data at 11h30 this morning which is expected to be at 6.6 percent. On the global side will analysts watch this afternoon the release of U.S. housing figures. We should continue to see consolidation, keeping an eye on the MTN/Bharti deal……

Japanese stocks rose to a 10-month high on Wednesday, driven by a modest shift into defensive sectors, while stocks in Shanghai turned positive on the week as investors cheered corporate results. Thin summer trading volumes, however, kept prices choppy and markets generally remained in ranges. Major European stock futures were down 0.2 percent STXEc1 after the cash market closed at the highest since early October, while U.S. stocks futures were up 0.4 percent SPc1, set to extend gains after U.S. single-family home prices grew for a second straight month. The Ifo survey of German business sentiment is expected to show an across the board pickup later on Wednesday, playing into the story that recoveries are taking hold around the world.

Current levels

Rand / Usd
7.7700-7.8100

Rand / Euro
11.1200-11.1700

Rand / Sterling
12.6000-12.6500

Jpy / Rand
12.07-12.12

Jpy / Usd
94.12

Usd / Euro
1.4315

Gbp / Usd
1.6327

Gold
$948.00

Brent
$71.95

Expected ranges

Rand / Usd
7.6500-7.8500

Rand / Euro
11.0000-11.2000

Rand / Sterling
12.5500-12.7500

Jpy / Rand
12.05-12.25