US dollar notes are seen in this picture illustration.
The rand on Tuesday strengthened against the dollar, but remained range bound as the markets await key US data this week and as an ANC/EFF coalition probability was seen to reduce.
By 10.26am, the rand was 0.61% up at R18.4688 to the dollar.
The dollar index steadied around 105.3 as investors braced key US inflation readings this week that could influence the outlook for interest rates. All eyes will be on Wednesday’s consumer price index report for April which is expected to show that inflation slowed last month.
Markets also look ahead to producer inflation data, retail sales figures and Federal Reserve Chair Jerome Powell’s remarks on Tuesday.
Bianca Botes, a director at Citadel Global, said range-bound trade was the order of the day on Monday, as traders stayed away from taking any major positions before Wednesday’s highly anticipated US consumer price index release (CPI).
As part of the markets’ monitoring of inflation, the focus on Tuesday falls on US Producer Price Index data. UK unemployment numbers, local gold and mining production, as well as local unemployment, are also on the today’s calendar.
The rand remains in favourable terrain and is trading at R18.36 to the dollar, R19.81 to the euro and R23.06 to the pound.
“Tomorrow’s US CPI release will likely provide new impetus for the local unit,” Botes said.
Annabel Bishop, the chief economist at Investec, said on Monday in a note: “The rand continues to make incremental gains, reaching R18.39/$ on Friday, and R18.34/$ today, gaining as the risk premium built into SA’s currency and bond yields starts to unwind as an ANC/EFF coalition probability is seen to reduce.”
Trading Economics said the JSE index was flat to lower around 78 620 points on Tuesday, after touching fresh 10-month highs in the prior session, as investors awaited key inflation data that could provide clues on how soon the Federal Reserve will be able to consider cutting interest rates.
Traders continued to monitor the global earnings season and corporate news. On the domestic front, all eyes would be on mining data and quarter unemployment figures set to be released during the day, it said.
Among single stocks, Karoo led the losses with a nearly 7% drop, followed by Powerfleet, down 6.5%. Anglo American Platinum saw a more than 6% decline after its parent company, Anglo American, announced plans to exit diamond, platinum and coal mining in a massive restructuring to thwart a takeover attempt by rival BHP Group.
MTN Group faced a 2.5% decline amid the release of disappointing first-quarter results for 2024, with the ongoing weakness of the Nigerian naira continuing to impact the company’s performance, Trading Economics said.
Brent
Brent crude futures held near $83.50 (R1539) per barrel on Tuesday after gaining about 0.7% in the previous session, underpinned by concerns over potential supply disruptions in Canada.
Markets were worried that Canada’s wildfire season could affect the country’s 3.3 million barrels per day production capacity.
In the Middle East, Iraqi Oil Minister Hayyan Abdul Ghani said over the weekend that they would comply with Opec+ policy on production cuts to be made at its upcoming meeting on June 1, reversing a previous statement that Iraq would not agree to any new output cuts. Investors now looked ahead to monthly market reports from Opec+ and the International Energy Agency this week for fresh insights on supply and demand factors in the oil markets, Trading Economics said.
Gold
Gold prices held steady near $2 340 per ounce on Tuesday, as investors shifted their attention to the upcoming US inflation reports this week, seeking additional insights into the Federal Reserve’s monetary policy path amid mixed cues from Fed officials, Trading Economics said.
BUSINESS REPORT