Date: 15th January 2010
Date: 01 March 2011 USD-ZAR 6.9128/7.1084 GBP-USD 1.6218/322 GOLD $1 413.54
EUR-ZAR 9.5036/6632 USD-JPY 81.968/82.398 BRENT 112.36
GBP-ZAR 9.5036/6632 AUD-USD 1.0110/60 DJI 12 226.34
EUR-USD 1.3763/65 R157 7.805% 3M JIBAR 5.575%
Time (GMT)
Country
Event
Month
Exp
Prior
09:00 09:00
SA SA
Bond Auction (R204- R1100mn; R208-R1000mn) Kagiso PMI
Feb
07:00 09:00 09:00 09:30
GB DE EZ GB
Nationwide House Prices m/m Manufacturing PMI Manufacturing PMI Manufacturing PMI
Feb Feb Feb Feb
-0.20% 62.6 59 61
-0.10% 62.6 59 62
14:00 15:00 15:00
CA US US
BOC rate decision Construction spending ISM Manufacturing PMI
N/A Jan Feb
1.00% -0.50% 60.5
1.00% -2.50% 60.8
54.6
Today’s Talking Point Kagiso PMI (Feb): The Kagiso PMI climbed to 54.6 on a seasonally adjusted basis in Jan. This was the strongest figure since preparations for the World Cup last year. Encouragingly, new sales orders increased and backlogs of orders decreased, indicating the prevalence of spare capacity. This goes hand in hand with pressure on the employment component, and pressure on this component is likely to continue in the months ahead given the rise on the prices component. Higher energy prices pose a risk to import prices going forward.
Rand Update Amid the turmoil in oil markets as well the tensions that are rising in North Africa and the Middle East, many investors are expressing disbelief at the ability of the ZAR to stage a recovery and defy bearish sentiment that the local unit would come under further pressure through the course of the next few quarters to end the year substantially weaker than current levels. What is raising some eyebrows this time is that the commodity prices are rising to levels that now many acknowledge as inflationary and recessionary. In truth, they have been on this path all along and if one were to look for the reasons for this, one would have to look squarely to the monetary policies implemented by the developed markets whose very aim is to try and reflate asset prices. Nevertheless, whilst the Fed and the ECB are engaging in such policies, further asset price inflation cannot be ruled out which may go a long way to explaining how equity, commodity and emerging market assets have continued to enjoy strong support. According to Reuters data (bid chart), the ZAR finished stronger vs. the USD on Monday, closing at R6.9135 from R7.001 on Friday. Similarly, the ZAR strengthened against the EUR, ending at R9.5806 from R9.6319 on Friday, while also finishing stronger vs. the GBP at R11.2833 from R11.2893 the previous day.
Bond Update
By large the movement in the bond market yesterday were flat. The longer end of the curve came under pressure relative to the shorter end of the curve with many players still digesting the Budget Policy Statement for 2011/12 and implications of the extra issuance (borrowing from National Treasury) that is likely to come to market over the coming year. Despite the firmer ZAR, which traditionally bodes well for a softening in inflation and interest rate expectations, that commodity prices remained resilient, bond yields failed to migrate lower. Overall at the close, the benchmark R157 and R186 closed weaker yesterday. The R157 yield ended higher from 7.765% at Monday’s close to 7.780%, while the R186 yield closed at 8.960% 4.5bps higher from Monday’s close of 8.915%.
JSE Update JSE information will no longer be included in the daily report, however should you want to see this information in the future, we would welcome the feedback
This report is provided on a complimentary basis by IQuad Group Limited and is prepared by Econometrix Treasury Management (Pty) Ltd. www.e-treasury.co.za DISCLAIMER: IQuad Limited (IQuad) obtains information for its analyses from sources, which it considers to be reliable, but IQuad does not guarantee the accuracy or completeness of its analyses or any information contained therein. IQuad makes no warranties, expressed or implied as to the results obtained by any person or entity from use of its information and analyses, and makes no warranties or merchantability or fitness for a particular purpose. In no event shall IQuad be liable for indirect or incidental, special or consequential damages, regardless or whether such damages were forseen or unforeseen. IQuad shall be indemnified and held harmless from any actions, claims, proceedings, or liabilities with respect to its information and analyses. Clients should be fully aware of the risks involved in trading stock market related products. All illustrations, forecasts or hypothetical data is for illustrative purposes only and is not guaranteed. The information contained in this communication does not constitute an offer, advertisement or solicitation for investment, financial or banking services. It is for informative purposes and not intended to constitute advice in any form, including but not limited to investment, accounting, tax, legal or regulatory advice. The information therefore has no regard to the specific investment objectives, financial situation or particular needs of any specific recipient.
EUR-ZAR 9.5036/6632 USD-JPY 81.968/82.398 BRENT 112.36
GBP-ZAR 9.5036/6632 AUD-USD 1.0110/60 DJI 12 226.34
EUR-USD 1.3763/65 R157 7.805% 3M JIBAR 5.575%
Time (GMT)
Country
Event
Month
Exp
Prior
09:00 09:00
SA SA
Bond Auction (R204- R1100mn; R208-R1000mn) Kagiso PMI
Feb
07:00 09:00 09:00 09:30
GB DE EZ GB
Nationwide House Prices m/m Manufacturing PMI Manufacturing PMI Manufacturing PMI
Feb Feb Feb Feb
-0.20% 62.6 59 61
-0.10% 62.6 59 62
14:00 15:00 15:00
CA US US
BOC rate decision Construction spending ISM Manufacturing PMI
N/A Jan Feb
1.00% -0.50% 60.5
1.00% -2.50% 60.8
54.6
Today’s Talking Point Kagiso PMI (Feb): The Kagiso PMI climbed to 54.6 on a seasonally adjusted basis in Jan. This was the strongest figure since preparations for the World Cup last year. Encouragingly, new sales orders increased and backlogs of orders decreased, indicating the prevalence of spare capacity. This goes hand in hand with pressure on the employment component, and pressure on this component is likely to continue in the months ahead given the rise on the prices component. Higher energy prices pose a risk to import prices going forward.
Rand Update Amid the turmoil in oil markets as well the tensions that are rising in North Africa and the Middle East, many investors are expressing disbelief at the ability of the ZAR to stage a recovery and defy bearish sentiment that the local unit would come under further pressure through the course of the next few quarters to end the year substantially weaker than current levels. What is raising some eyebrows this time is that the commodity prices are rising to levels that now many acknowledge as inflationary and recessionary. In truth, they have been on this path all along and if one were to look for the reasons for this, one would have to look squarely to the monetary policies implemented by the developed markets whose very aim is to try and reflate asset prices. Nevertheless, whilst the Fed and the ECB are engaging in such policies, further asset price inflation cannot be ruled out which may go a long way to explaining how equity, commodity and emerging market assets have continued to enjoy strong support. According to Reuters data (bid chart), the ZAR finished stronger vs. the USD on Monday, closing at R6.9135 from R7.001 on Friday. Similarly, the ZAR strengthened against the EUR, ending at R9.5806 from R9.6319 on Friday, while also finishing stronger vs. the GBP at R11.2833 from R11.2893 the previous day.
Bond Update
By large the movement in the bond market yesterday were flat. The longer end of the curve came under pressure relative to the shorter end of the curve with many players still digesting the Budget Policy Statement for 2011/12 and implications of the extra issuance (borrowing from National Treasury) that is likely to come to market over the coming year. Despite the firmer ZAR, which traditionally bodes well for a softening in inflation and interest rate expectations, that commodity prices remained resilient, bond yields failed to migrate lower. Overall at the close, the benchmark R157 and R186 closed weaker yesterday. The R157 yield ended higher from 7.765% at Monday’s close to 7.780%, while the R186 yield closed at 8.960% 4.5bps higher from Monday’s close of 8.915%.
JSE Update JSE information will no longer be included in the daily report, however should you want to see this information in the future, we would welcome the feedback
This report is provided on a complimentary basis by IQuad Group Limited and is prepared by Econometrix Treasury Management (Pty) Ltd. www.e-treasury.co.za DISCLAIMER: IQuad Limited (IQuad) obtains information for its analyses from sources, which it considers to be reliable, but IQuad does not guarantee the accuracy or completeness of its analyses or any information contained therein. IQuad makes no warranties, expressed or implied as to the results obtained by any person or entity from use of its information and analyses, and makes no warranties or merchantability or fitness for a particular purpose. In no event shall IQuad be liable for indirect or incidental, special or consequential damages, regardless or whether such damages were forseen or unforeseen. IQuad shall be indemnified and held harmless from any actions, claims, proceedings, or liabilities with respect to its information and analyses. Clients should be fully aware of the risks involved in trading stock market related products. All illustrations, forecasts or hypothetical data is for illustrative purposes only and is not guaranteed. The information contained in this communication does not constitute an offer, advertisement or solicitation for investment, financial or banking services. It is for informative purposes and not intended to constitute advice in any form, including but not limited to investment, accounting, tax, legal or regulatory advice. The information therefore has no regard to the specific investment objectives, financial situation or particular needs of any specific recipient.
