Compiled by Dhivana Rajgopaul
JOHANNESBURG – The rand oscillated during Friday’s European session, remaining at the mercy of external sentiment according to NKC Research.
With a thin economic calendar on both South African and US soil, sentiment remained in the driving seat with United States fiscal stimulus hopes pitched against resurging global infections concerns.
Remaining with the US economy, the odds look stacked against a deal for a large-scale fiscal package. Our October baseline forecast assumed $1.2tn of additional fiscal stimulus, and failure to provide more stimulus at this point risks stalling the recovery as increasing numbers of claimants exhaust their regular state unemployment benefits.
Even assuming fresh stimulus, we see the economy contracting 3.5 percent in 2020 and expect a relatively soft GDP rebound of around 3.7 percent in 2021. Back on home soil, markets await the medium-term budget policy statement (MTBPS) on October 28, with specific focus on the outlook for struggling parastatals.
At the close of local trade, the rand quoted 0.22 percent stronger at R16.25/$, after trading in range of R16.16/$ - R16.29/$. The rand traded slightly weaker overnight. Expected range today R16.00/$ - R16.40/$.
South African bourse
The JSE All Share (+0.99 percent) ended on the front foot during Friday’s session thanks to gains in large financial stocks. In the overall emerging market sphere, the MSCI Emerging Market Index (-0.09 percent) traded lower.
Brent crude oil
The Brent oil price traded little changed on Friday as demand concerns, and surging coronavirus cases kept a lid on gains. At close of local trade, benchmark Brent crude futures quoted 0.05% weaker at $42.27pb. Crude prices were lower during Asian trade this morning.
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