Rand Report: Brexit spooks the markets

The rand report is delivered to you by Sable International

Over the previous week our screens have been graced by quite a few headlines pertaining to the ongoing Brexit rollercoaster. First it appeared there was no deal anymore, then just a few days later we noticed progress with Boris set to fulfill the EU negotiator. The emotional backwards and forwards with these Brexit negotiations have put the markets on edge, with massive swings seen with all currencies related to the GBP. 

Apart from that, information broke late final week of US President Donald Trump testing constructive for COVID-19. This despatched the USD on a downward spiral and the stock indices took successful as nicely. 

However, as the new week kicked off, the fears related to Trump’s sickness had subsided and the markets got here roaring again to life. There appeared to be a little bit of positivity round Brexit as nicely, as the GBP picked up barely in Monday commerce. 

Data-wise, the previous week noticed South African unemployment hit 23.3%, the place the market was anticipating numbers nearer to the 35% area – this was clearly constructive, however at that time limit all eyes had been centered on Brexit, or the lack of progress on this entrance, thus the ZAR didn’t react an excessive amount of. And though headwinds stay to the SA financial system, the rand has not taken an excessive amount of pressure. 

There isn’t a lot to anticipate domestically on the knowledge aspect of issues in the coming week, so one ought to look to international headlines to find out the path of the foreign money. 

On the international entrance, tensions stay with the US presidential elections looming and Brexit negotiations nonetheless dealing with many hurdles. These two main political occasions will with none doubt trigger volatility in the weeks forward and one ought to hold an in depth eye on any developments on this regard.

Market occasion calendar

Tuesday 6 October

  • EUR: European Central Bank (ECB) President Lagarde speech
  • US: Fed Chair Powell Speech

Wednesday 7 October

  • US: Federal Open Market Committee (FOMC) minutes
  • US: Initial jobless claims

Thursday 8 October

  • UK: Bank of England’s (BoE) Governor Bailey speech (GBP)

Friday 9 October:

  • UK: Gross Domestic Product


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