Rand flat ahead of Sarb interest rate decision
JOHANNESBURG - The rand ebbed, and the dollar retained dominance as traders are looking ahead to this week’s MPC decision announcement and inflation data according to NKC Research.
Against consensus (for a hold), we expect a rate cut of 25 bps, while this week will also host the mining and retail sales releases for November.
Short-term volatility risk aside, the external backdrop generally remains a favourable one. Chinese GDP growth rose to 6.5 percent y-o-y in Q4, beating our forecast of 5.8 percent, amid an acceleration in industrial value added, consumption, investment and exports growth.
Overall, China’s GDP grew 2.3 percent in 2020 and given the Q4 data, we will revise up our 2021 China growth forecast further. We retain a bullish outlook on the rand despite a feeble domestic backdrop.
At the close of local trade, the rand quoted 0.15 percent weaker at R15.25/$, after trading in range of R15.19/$ - R15.38/$. The local unit traded firmer during this morning Asian trading session. Expected range today R15.00/$ - R15.30/$.
South African bourse
The JSE All Share (+0.28 percent) ended higher yesterday led by a surge in large technology (+6.47 percent) and industrial (+2.35 percent) stocks. In the overall emerging market sphere, the MSCI Emerging Market Index traded flat yesterday after reaching a record high on Friday.
Brent crude oil
The Brent oil price retreated further from the 11-month high reached last week, as the recent supply-led rally petered out. At the close of local trade, benchmark Brent crude futures quoted 0.18 percent lower at $55.00pb. Crude prices stronger during Asian trade this morning.