The South African rand dipped in cautious trade ahead of a busy economic calendar this week, which kicked off with the Q1 GDP release according to NKC Research.
While the first quarter growth figures beat expectations – with a contraction of 2 percent q-o-q smashing the analyst forecast of around -4 percent q-o-q – sentiment remained weak as Covid-19 infections soared across the country. Weak trade and fiscal figures are expected to keep the local unit on the back foot over the short term, especially against a global backdrop of second-wave fears. South Africa’s real GDP is projected to return to pre-crisis levels only by 2023, at the earliest, with our baseline projection pointing towards a contraction of 9.1 percent this year. At the close of local trade, the rand quoted 0.35 percent weaker at R17.36/$, after trading in range of R17.25/$ – R17.41/$. The rand was stable overnight, today’s expected range is R17.20/$ – R17.50/$.
South Arican bourse
The JSE All Share struggled to gain a solid footing yesterday, as large financial (-0.72 percent) stocks weighed. In the overall emerging market sphere, the MSCI Emerging Market Index (+0.11 percent) traded higher.
Brent crude oil
The Brent oil price traded on the back foot as rising Covid-19 cases weighed on demand prospects compounded by a possible resumption of Libyan oil output. At the close of local trade, benchmark Brent crude futures quoted 0.68 percent lower at $41.12pb. Crude prices traded firmer during Asian trade this morning.
