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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

U.S trade Deficit to China Up

RDG Brokers — Fri, 04 Dec 2009 07:47:26 +0000

South Africa’s rand was unable to hold on to gains below 7.30/$ which caused investors and speculators to buy back short dollar positions. This morning we are back above 7.40/$, we should keep in mind that S.A. Reserve bank is not comfortable with the rand’s strength and will probably continue to build reserves into any rand rallies. Trading conditions are thin which will increase volatility. The exchange rate of the Yuan is not responsible for the United States’ widening trade deficit with China, China’s ambassador to the country said on Thursday. “Personally, I think the root cause for the fiscal deficit and the trade deficit here (in the United States) is not really the exchange rate of the (Yuan),” Zhou Wenzhong told a National Committee on United States-China Relations dinner. China has had a huge trade surplus with the United States, and is the largest foreign holder of U.S. government bonds. The U.S. trade deficit with China widened 9.2 percent in September to $22.1 billion, the highest since November 2008, according to U.S. data released last month. Zhou said that the Yuan had appreciated by some 20 percent since reform of the exchange rate began in 2005. China allowed the Yuan to rise from 2005 to 2008 before effectively repegging it to help its exporters cope with a slump in global demand. It has moved little since.
Current levels
Rand / Usd	7.4000-7.4500
Rand / Euro	11.1200-11.1700
Rand / Sterling	12.2300-12.2800
Jpy / Rand	11.85-11.90
Jpy / Usd	88.10
Usd / Euro	1.5055
Gbp / Usd	1.6533
Gold	$1 204.00
Expected ranges
Rand / Usd	7.3000-7.5000
Rand / Euro	11.0500-11.2500
Rand / Sterling	12.1500-12.3500
Jpy / Rand	11.80-12.00

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

“No Surprise”

RDG Brokers — Thu, 01 Oct 2009 23:15:46 +0000

We had an extremely volatile session yesterday after the trade deficit was announced at almost 2 billion rand, much higher than the expected 300 million the rand started weakening. In late afternoon trade it was announced that the MTN/Bharti transaction has been cancelled, this caused panic buying by traders pushing the local unit towards 7.60/$. The euro is lower this morning and with all the negative news out the rand will remain under pressure. German central bank Chief Alex Weber rejected on Wednesday calls for Berlin to help reduce global financial imbalances with policy action that would cut the country’s exports and current account surpluses. “This is not something policy should target or can target. It would mean intervening against optimal structures that have developed in a free market environment,” he told reporters during an economic seminar. Weber heads the German Bundesbank.
Current levels
Rand / Usd	7.5500-7.6000
Rand / Euro	11.0000-11.0500
Rand / Sterling	12.0700-12.1200
Jpy / Rand	11.85-11.90
Jpy / Usd	90.00
Usd / Euro	1.4563
Gbp / Usd	1.5955
Gold	$1 005.00
Brent	$68.44
Expected ranges
Rand / Usd	7.5000-7.7000
Rand / Euro	11.0000-11.2000
Rand / Sterling	12.0000-12.2000
Jpy / Rand	11.80-12.00

Recovery in sight for Global Market

RDG Brokers — Wed, 30 Sep 2009 08:49:50 +0000

South Africa’s rand continued to trade in a 7.35/$ to 7.45/$ trading range, with little interest shown by market players. Today is the due date for the MTN/Bharti announcement and the general expectation is that the announcement will be postponed once again. Most other currencies are also trading sideways. Locally we have the release of our trade figures market expectations is at -0.3 billion rand, unless this figure is way out of line it should be a non event. Manufacturing activity powered ahead in Japan and China in September, providing fresh evidence of a global recovery, but other data from Tokyo showed worrisome signs that the impact of massive government stimulus spending may be starting to fade. Japanese manufacturing grew at its fastest pace in three years, with expanding new orders at home and abroad, while factories in China cranked up production for the sixth straight month, private activity indexes showed. Elsewhere, stronger-than-expected retail sales in Australia added to market expectations that its central bank could start to raise interest rates as early as November as the economy regains momentum, while business confidence in New Zealand climbed to its strongest level in a decade. A purchasing managers’ index on China showed a 4 trillion Yuan ($585 billion) government stimulus programme and ultra-loose growth-supportive policy continued to bolster the domestic economy in September, while global demand for Asian goods slowly recovered
Current levels
Rand / Usd	7.3500-7.4000
Rand / Euro	10.8000-10.8500
Rand / Sterling	11.8500-11.9000
Jpy / Rand	12.12 -12.17
Jpy / Usd	89.80
Usd / Euro	1.4619
Gbp / Usd	1.6060
Gold	$997.00
Brent	$65.80
Expected ranges
Rand / Usd	7.33000-7.5300
Rand / Euro	10.8000-11.0000
Rand / Sterling	11.8000-12.0000
Jpy / Rand	12.00-12.20

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

Traders on the Fence

RDG Brokers — Tue, 25 Aug 2009 10:16:00 +0000

South Africa’s rand was once again to break below the7.70/$ resistance and profit taking after the rally saw the local unit to weaken towards 7.90/$. Traders will be waiting for important economic data locally as well as the U.S. for further clues on currencies. In the meantime we will probably remain range bound. The yen headed higher on Tuesday as share markets fell and investor interest in higher-yielding currencies ebbed, while currencies took in their stride news that Federal Reserve chief Ben Bernanke would be reappointed. A U.S. administration official said President Barack Obama would reappoint Bernanke for a second term as Fed chairman on Tuesday. The dollar showed little reaction to the news as market participants had thought there was a good chance Bernanke would be given a second term to reassure financial markets as they recover from the global economic crisis, analysts said.

Current levels Rand / Usd 7.8100-7.8600 Rand / Euro 11.1500-11.2000 Rand / Sterling 12.8000-12.8500 Jpy / Rand 11.98-12.03 Jpy / Usd 94.12 Usd / Euro 1.4295 Gbp / Usd 1.6470 Gold $945.00 Brent $73.74 Expected ranges Rand / Usd 7.7500-7.9500 Rand / Euro 11.1000-11.3000 Rand / Sterling 12.7500-12.9500 Jpy / Rand 11.95-12.15

Interest Rate Cut??

RDG Brokers — Thu, 13 Aug 2009 10:09:23 +0000

South Africa’s rand rallied overnight and is currently trading close to 8.00/$. The euro and pound rallied overnight which supported the local unit. A rally in the Dow Jones also contributed to the rand’s strength. We have the MPC announcement later today on local interest rates some people are calling for a 50 basis point cut, however while the Global recession appears to be recovering, rates should remain unchanged.

The dollar edged lower on Thursday after the Federal Reserve painted a less gloomy outlook for the U.S. economy, an assessment that led investors to return to commodity-linked currencies. The Fed said it would slow the pace at which it buys Treasuries by extending the duration, but not the size, of its $300 billion programme to buy long-term government securities. The U.S. central bank also kept interest rates near zero and said they would likely stay there for an extended period, which dealers said scaled back some market speculation that the Fed might raise rates soon.

Current levels

Rand / Usd
8.0000-8.0500

Rand / Euro
11.4000-11.4500

Rand / Sterling
13.2000-13.2500

Jpy / Rand
11.98-12.03

Jpy / Usd
96.23

Usd / Euro
1.4256

Gbp / Usd
1.66565

Gold
$952.00

Brent
$73.77

Expected ranges

Rand / Usd
7.9500-8.1500

Rand / Euro
11.3500-11.5500

Rand / Sterling
13.1000-13.4000

Jpy / Rand
11.90-12.10