Tue. May 26th, 2020

Ramaphosa has been inaugurated, now for the rest of the cabinet

This week the focus is on Brexit and the South African cabinet.

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This Rand report is brought to you by Sable International

With President Cyril Ramaphosa’s inauguration over, attention has turned to who will be appointed to be part of his new cabinet. Ramaphosa will need to reward his party’s allies, the Congress of South African Trade Unions and the South African Communist Party. David Mabuza looks set to be Ramaphosa’s number two.

Last week, Mabuza asked to have his swearing-in postponed after he was accused of bringing the ANC’s integrity into disrepute following a series of scandals during his time as Premier of Mpumalanga.

Looking to this week’s local data releases, it’s expected that the money supply numbers will continue their steady climb on Thursday after being tipped to be released at 7.0%, marking a 1.5% climb since the beginning of the year. On Friday, the April balance of trade numbers will be released. Exports surged and imports dwindled, which allowed for a R5 billion surplus in March, however we expect a surplus of R1.4 bn for April.

77b74663 2019 05 28 the rand report - Ramaphosa has been inaugurated, now for the rest of the cabinet

Brexit has shifted back into focus after
Theresa May announced that she will be stepping down on 7June. The
race is now on for who will take her place and revive a deal for the UK to
leave Europe.

With the US-China trade talks on hold,
another catalyst that might give the Rand some strength is the release of the
Chinese PMI data on Friday. Anything better than the expected 49.9 for
manufacturing and 54.3 for non-manufacturing should see some solid gains for
the Rand and other emerging currencies.

Market event calendar

Tuesday 28 May

  • Eurozone Business Climate Indicator
  • This is an indicator of the
    current situation of businesses in the Eurozone and their prospects.

Wednesday 29 May

  • French GDP data
  • French first quarter GDP
    numbers are out and anything higher than the expected 0.3% will boost the Euro.

Thursday 30 May

  • US GDP data
  • Expected first quarter growth
    of 3.2% looks set to give the US Dollar some much-needed gains.

Friday 31 May

  • Chinese PMI numbers
  • The Chinese manufacturing and
    non-manufacturing PMI numbers could give the comdolls some strength.
  • US Personal income and personal spending
  • Personal income numbers are expected
    to come in at 0.3% while analysts have said that personal spending is set to
    drop to 0.2%. Any deviations will cause volatility for the US Dollar.

Dean Reich

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