The ZAR starts the new week off on a slightly firmer footing having recovered into the end of last week. Still, the rand faces significant market headwinds along with its emerging-market peers, as rising geopolitical risk in the Middle East and uncertainty around the upcoming US elections keep investors cautious. Additional monetary easing in China this morning might lift market risk appetite at the margin, but there still appears to be concern in the market about whether Chinese authorities are doing enough to reflate an economy suffering from deep-rooted problems.
Looking at the week ahead, there are no major market-moving data releases on the international card, but investors will still need to navigate the publication of the Fed’s Beige on Wednesday, PMI data from out of the world’s biggest economies on Thursday, and the US durable goods orders print on Friday. Locally, the market will have the SARB’s leading indicator to look to for fresh insights into the South African economy’s outlook on Tuesday, followed by CPI inflation data on Wednesday. The CPI numbers are expected to show that the SARB has inflation well under control, and could even support more calls for a 50bp rate cut at the upcoming meeting.