Rand Report: Global data takes control

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The GBP’s weakness is likely due to the lack of a trade deal between the UK and the European Union (EU). The UK government has mentioned that the door remains ajar for a post-Brexit trade deal even though UK Prime Minister Boris Johnson has stated he is content to walk away with a no-deal Brexit. A no trade deal exit will cause the UK and the EU to trade under the World Trade Organisation’s most favoured rules.

It will be an interesting week ahead with the final presidential debate between Trump and Biden taking place on Thursday, as well as talks surrounding a stimulus package in the US. The talks have been beneficial to risk sensitive currencies and have been kind to the rand in the new week. The optimism around a possible Covid-19 vaccine becoming available in the next few months has also been welcoming to emerging markets.

In terms of local data, the Medium Term Budget Policy Statement (MTBPS) was set to be released on Thursday, but it has been delayed by a week at Tito Mboweni’s request. The delay of the MTBPS could be an indication of the muddled political and financial economy. The global markets have kept the rand quite steady in the new week. The ZAR has not moved much and is currently trading at R16.55 to the USD and R21.42 to the Pound as of 06:00 GMT. Any major gains by the rand are likely hindered by fears of a second wave of infections in South Africa.

Market event calendar

Wednesday 21 October 

• UK: Inflation Rate (YoY) September – Expected at 0.4%
• CAN: Inflation Rate (YoY) September – Expected at 0.3%

Thursday 22 October

• GER: GfK Consumer Confidence November – Expected at -3
• US: Existing Home Sales (MoM) September – Expected at 3%

Friday 23 October 

• UK: GfK Consumer Confidence October – Expected at -26
• Japan: Inflation Rate (YoY) September – Expected at 0.1%