The rand juggled cautious sentiment as coronavirus infections are surging across the globe and frustration hit as South African power utility Eskom switched off the lights against a soft US PPI release according to NKC Research.
Embattled power parastatal Eskom announced the abrupt start of stage-2 load shedding on Friday as generation unit breakdowns accelerated. During a thin US calendar, the decline in producer prices underscores that price pressures in the broader economy remain extremely tame and reinforces the Fed’s strong dovish posture. US producer prices fell 0.2 percent m-o-m in June, a weaker-than-expected outcome as higher energy prices were offset by lower services prices. At close of local trade, the rand quoted 1.08 percent stronger at R16.75/$, after trading in range of R16.75/$ – R16.97/$. The rand wobbled in response to President Cyril Ramaphosa’s speech last night. Expected range today R16.65/$ – R16.90/$.
South African bourse
The JSE All Share (-0.66 percent) closed in the red on Friday as coronavirus concerns weighed. Large telecom (-1.74 percent) and tech (-2.53 percent) stocks were among the day’s biggest laggards. In the overall emerging market sphere, the MSCI Emerging Market Index (-0.97 percent) traded lower
Brent crude oil
The Brent oil price rebounded strongly on Friday after the International Energy Agency (IEA) increased its 2020 demand forecast, but rising new coronavirus cases kept a lid on gains. At the close of local trade, benchmark Brent crude futures quoted 2.51 percent higher at $2.51pb. Crude prices were mostly on the back foot during Asian trade.