I have a nasty feeling that we’ve seen the best of the rand for a while given last week’s pull back to just below 14.0000 to the USD. If the truth be told, I was hoping we would see a little more, but alas it was not to be.
EM are again under pressure and events in the Middle East (Saudi Arabia) are causing some concern. Add to that Venezuela opting to “restructure its debt portfolio” (read technical default) and it’s apparent that all’s not well in the EM world.
Of course we in South Africa also have an enormous amount to digest after the release of Pauw’s infamous book (top 10 globally on Amazon’s ebook list) spilling the beans on the allegedly nefarious state of South Africa’s esteemed institutions. Note to self – if you want to attract attention to your writing, make allegations against state institutions and get them to try interdict you. This will quadruple your reader base.
Rating agencies are apparently in town, trying to assess the situation ahead of their late November announcements on ZA Inc. All in all, a rather nervous start to the week.
The developed world is busy with rate ‘normalisation’, slowly removing stimulus measures that have been in place for the better part of a decade now – thus undoing an important component of the carry trade attraction. As a consequence, I maintain my bearish bias – as we will have a lot to digest over the next few weeks.
Key technical levels to watch are 13.9500 and 14.3500. Good luck.
*Numbers cited are at the time of writing on 7 November 2017 at 07h30.