DAILY MARKET UPDATE - 08 JULY 2019 | Merchant West


capital markets

Merchant West Capital Markets

USD/ZAR 14.1821 | EUR/ZAR 15.9225 | GBP/ZAR 17.7533

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JHB: (011) 305-9500 | PTA (012) 742-8600 | CPT (021) 552-7007 

email: treasury@merchantwest.co.za

Market Data:

08 July - US: Consumer Credit

09 July - US: NFIB Small Business Optimism | JOLTS Job Openings

10 July - UK: GDP | Industrial Production y/y | Manufacturing Production y/y| Trade Balance | US: MBA Mortgage Applications | FOMC Meeting Minutes | Fed's Bullard To Speak

11 July - SA: Mining Production | Gold & Platinum Production | US: CPI (y/y) | Initial Jobless Claims | Monthly Budget Statement

12 July - EC: Industrial Production WDA (y/y) | US: PPI Final Demand (y/y)

Market Commentary:

The rand reversed its promising trend towards the end of last week following stronger non-farm jobs data from the US. “The South African currency was on course for a fall of around 0.8% for the week after dropping 1% against the U.S. dollar to 14.1900” (source: Reuters). The local unit was not the only emerging market currency to end the week lower, with the lira coming under pressure as Turkish President Tayyip Erdogan fired the central bank governor, bringing the bank`s independence into question. On the JSE,  the Top40 lost 0.4% and the AllShare 0.41%.

In the US market, “The dollar rose broadly on Monday after strong U.S. jobs growth in June suggested the Federal Reserve will not aggressively cut interest rates later this month. U.S. nonfarm payrolls rebounded in June to 224,000, the most in five months, data showed on Friday, beating economists’ consensus estimate of 160,000. The solid outcome virtually wipes out chances for a half point Fed rate cut at the end of July, but modest wage gains and other data showing the world’s largest economy was losing steam could still encourage the central bank to cut rates by 25 basis points. “There is no great urgency for the Fed to act, and surely not by the half a percentage point move,” said Marc Chandler, chief market strategist at Bannockburn Global Forex”. (source: Reuters)

In the European markets, “The common currency came under pressure on Friday after data showed that German industrial orders fell far more than expected in May and the Economy Ministry warned that this sector of Europe’s largest economy was likely to remain weak in the coming months”. “The British pound hit a six-month low to the dollar on Friday, after poor economic data and a rise in expectations that the Bank of England will cut interest rates. Better-than-expected U.S. jobs data sparked a rally in the dollar, adding to sterling’s losses”. (source: Reuters)

Range for the day: 14.10 -14.35