It’s a very wet and flooded East Coast this morning.  With ESKOM hitting us with elevated schedules now as high as stage 8!  Where to from here? Well the rand has taken a beating!

By the close of trading on Tuesday, the South African rand weakened against the US dollar.

  • Manufacturing production in South Africa contracted for a fifth consecutive month on an annual basis in October.
  • State owned and run power utility, Eskom stated that it would implement the highest stage of load-shedding so far, heightening concern that the economy could slip into another recession. However, Eskom later downgraded the expected load-shedding to stage 4, from stage 6. President Ramaphosa cut short his trip to Egypt to meet with all role-players.  With so many factors thrown into the pot of disaster, it is rumored that ESKOM will not recover.   Minerals Minister Gwede Mantashe announced yesterday that Government will fast trach alternative energy suppliers into the National Grid.
  • In the US, the NFIB small business confidence index rose in November to its largest month-over-month gain since May 2018, as business owners continued to invest, hire and increase wages.
  • On the flipside, nonfarm productivity fell by the most in nearly four years in 3Q19.
  • Tonight, the focus is on the FED, who are expected to keep rates on hold while locally our CPI is forecast to have fallen 0.1% in November to 3.6%.
  • China are still hopeful for an agreement before new US tariffs kick in on the 15th Dec, and the EU is hopeful that Boris Johnson wins the UK election tomorrow so that a Brexit deal can be reached. Results will be out on Friday morning.
  • The yield on benchmark government bonds rose yesterday. The yield on 2020 bond advanced to 6.87% while that for the longer-dated 2026 issue rose to 8.42%.

In early trade on Wednesday, the US dollar is trading 0.1% higher against the South African rand at R14.7988, while the euro is trading marginally higher at R16.4151. The British pound has declined 0.1% against the South African rand to trade at R19.4485.

By the close of trading on Tuesday, the euro advanced against most of the major currencies.

  • A strong rebound in German economic sentiment survey, with an unexpected rise in October exports boosting hopes for an upturn in Europe’s biggest economy.
  • A separate gauge measuring investors’ assessment of the economy’s current conditions improved in December.
  • The eurozone economic sentiment unexpectedly rose in December.
  • In the UK, gross domestic product (GDP) rose at its slowest annual pace in nearly seven years in October.

In early trade on Wednesday, the euro has marginally slipped against the US dollar to trade at $1.1092, while it has gained 0.1% against the British pound to trade at GBP0.8443.

If you are out and on the roads today be careful and observe a bigger following distance. Remember the roads are holding water and cars can aqua plain from any direction.