5 things you need to know before trading starts today
·24 Mar 2016
Here’s what is happening in the markets:
- While South Africa faces continued political turbulence, high inflation and rising food prices are a more pressing concern for consumers. Inflation spiked to 7% last month – the highest point in seven years – forcing the reserve bank to hike rates. With the current economic climate, economists expect another two rate hikes to come, at 25 basis points each.
- Deputy president Cyril Ramaphosa says that ANC members are “streaming in” to the office of Gwede Mantashe deliver the dirt on alleged Gupta influence on the state. The ANC established a structure within the office of the secretary general to handle any information about state capture. The deputy president made it clear that ‘the ANC is not for sale’, and that any concrete evidence to the contrary will be handled by the party.
- South African assets were undermined on Wednesday by a resurgent dollar, which knocked the rand and sent precious metals prices lower, taking the shares of producers down with them. On Thursday the rand was trading weaker at R15.41 to the dollar, R21.72 to the pound and R17.21 to the euro.
- In global news, The dollar advanced for a fifth straight session on Thursday, pressuring commodities and Asian shares after yet another Federal Reserve official talked up the chance of more than one increase in US interest rates this year. Japanese stocks were little changed on Thursday with investors reluctant to stake out fresh positions ahead of the end of the fiscal year.
- US oil prices fell in Asian trading on Thursday, adding to a slump in the previous session, after stockpiles rose for the sixth week to another record, sapping the strength of a two-month rally in prices. US oil was down $1.66 at $39.79 a barrel, while Brent crude futures were up to $40.54 a barrel.
In other news: South African mobile operator Cell C may have trouble with its recapitalisation process after one of the company’s biggest shareholders initiated legal proceedings to block the deal. The company, CellSA, is trying to get Cell C’s parent company 3C Communications liquidated.
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