Daily Commentary - 13 February 2018 | Merchant West

Daily Commentary - 13 February 2018

Contact Merchant West Capital Markets on: (+2711) 305-9500 or treasury@merchantwest.co.za

- USD / ZAR 11.9103 - EUR / ZAR 14.6901 - GBP / ZAR 16.5160 -

Economic Events:

13 Feb  : SA Unemployment - UK CPI Data

14 Feb :EU GDP Data - SA Retail Sales - US Retail Sales ; CPI data

15 Feb : US Initial Jobless ;Industrial Production ; PPI data

16 Feb : US Export /Import Prices ;Consumer Sentiment

Market Commentary:

The African National Congress highest structures have officially given President Zuma 48-hours to resign from the Presidency of the country according to few sources.  This decision came about after a gruelling 13-hour special NEC meeting that concluded at 03:00 this morning.  If he decides not to resign, the ANC NEC will possibly act through the parliament.  The two mechanisms to do so are either via a no-confidence motion or impeachment motion.  The later requires two-thirds majority and qualifying grounds of serious misconduct so a no-confidence motion would be the route of lesser resistance as it only needs a simple majority and no qualification.  Everyone will be paying close attention to the ANC media briefing at 14:00 this afternoon, this media briefing is said to summarise the official steps that will be taken regarding “Zexit”. ( Source : Investec )

Continued pressure on the treasury yields –the 10-year temporarily traded to a four-year high of 2.90% yesterday before reversing – remains a concern in the US, however, global fears tend to be fading as a result of the sustained rise in the US equity markets and the reduction in volatility since the crash last Monday. (Source : RMB)

U.S. President Donald Trump said on Monday he would push for a “reciprocal tax” against countries, including U.S. allies, that levy tariffs on American products, but officials did not provide details on how such a tax would be structured or what goods it would apply to. (Source : Reuters)

The Euro is trading around the $1.2300 level.  Buying the Euro was seen as a favourable trade over the past period on the view that the European Central Bank will scale back its stimulus later this year on the back of a strong recovery in the euro zone economy.  Most players in the market still have a bullish view of the Euro in the long term despite the lacks of new factors that could add impetus to further gains. (Source : ABSA)

Our range for the day : R 11: 8500 –R 12:0500 ( Prior to ANC Media briefing )