USD = R18.23  AUD = R12.25
GBP = R21.98  DXY = 104.18
EUR = R19.51Brent Crude = $86.51 per barrel

Not the best start to the week for the Rand, especially when the major hurdles this week still lie ahead of us.  We opened at R18.14 to the Dollar and quickly fell to R18.23 where we then hovered for the rest of the day. The Dollar Index actually gave up ground yesterday so the Rand should have strengthened, but a combination of Chinese headlines and jitters ahead of our cabinet reshuffle meant we had a poor showing.  Chinese market data was a massive tailwind for the Rand last week with their manufacturing and services PMI’s both coming in way above expectations, and in so doing supporting emerging market currencies like the Rand.  The weekend however saw the Chinese government release their 2023 GDP forecast of “around 5%” which is lower than the market was hoping for, and put a dampener on things for us yesterday. 

After a much anticipated cabinet reshuffle, and a couple of delays last night, Cyril Ramaphosa announced his new executive at 8:40pm.  As is the norm opposition parties have been quick to criticize the changes saying that cabinet remains bloated while under performing ministers just get moved around and not dismissed, but the main takeaway is the appointment of Dr Kgosientsho Ramokgopa as the Minister of Electricity.  Safe to say that this is going to be a high-pressure role with the country looking for immediate action in easing load shedding. 

The following from MoneyWeb:  Reacting to the announcement, Business Unity South Africa CEO Cas Coovadia said the new cabinet will have to demonstrate, with urgency, that ministers will be moving with speed to address the numerous crises the country is experiencing. “The ministers do not have the luxury of taking their time in getting into their roles, but must move with urgency and implement, implement, implement,” he said.

The following is from Reuters and suggests that pride might help the Rand:  The greenback slipped against a basket of currencies on Monday as investors awaited testimony by FED Chair Jerome Powell and jobs data due later this week for further indications on how much higher the US central bank is likely to raise interest rates. FED funds futures traders are pricing in a 76% probability the FED will raise rates by 25bps at its March 21-22 meeting, and a 24% likelihood of a 50bps increase. Analysts also note, however, that the FED may be reluctant to increase the pace of rate hikes again as it would likely spook investors by indicating that the bank made a mistake in switching to 25bps increases.

Local market data today sees our Q4 2022 GDP print at 11:30 which is expected to come in at -0.3% which would mean 2022 as a whole grew by 1.4%, significantly lower than the 4.1% growth in 2021. 

Japan’s real wages fell the most in nearly nine years in January, official data showed, as four-decade-high inflation squeezed the purchasing power of consumers and undercut efforts by policymakers to revive a COVID-ravaged economy. Wage trends in the world’s third-largest economy are under close market scrutiny because Bank of Japan officials have said that pay hikes, combined with 2 per cent inflation, are essential to it scaling back ultra-loose monetary policy.

Must be nice to be Jeff Bezos. The multi-billionaire isn’t shy about using his unimaginable wealth, with the latest example being his remarkably expensive yacht. The Bezos yacht has been in the news for well over a year now, as he initially planned to dismantle a bridge in order to move it out to the sea. Now, a Dutch Yachting website has uncovered the first footage of the boat out on the open water, and, well, it looks remarkable. The yacht includes a pool and a smaller, “support” yacht for the main ship.

Posted in