The rand was firmer on Wednesday morning and the JSE was weaker amid mixed global peers, with investors awaiting the presentation of the medium-term budget policy statement (MTBPS).
Finance minister Enoch Godongwana is expected to reaffirm the government’s focus on fiscal consolidation and prudent expenditure management when he tables his medium-term budget on Wednesday afternoon.
“The MTBPS will serve as a platform for the GNU to demonstrate its commitment to economic stability and fiscal discipline. Investors are focused on the government’s strategy to balance social support. They will also watch closely for indications on the government’s spending priorities, including wage bill constraints and potentially recalibrated inflation targets,” TreasuryOne currency strategist Andre Cilliers said.
“Any signs of greater private sector inclusion in economic reforms, such as SOE partnerships, could bolster market confidence and support the rand,” he Cilliers.
At 10.47am, the rand had strengthened 0.54% to R17.5622/$, 0.35% to R19.0368/€ and 0.38% to R22.8623/£. The euro was 0.24% firmer at $1.0842.
The rand remains rangebound, with resistance at R17.80 and support around R17.35, said Cilliers.
“The currency is positioned to respond favourably if today’s budget provides positive signals on fiscal restraint and structural reforms.”
Globally, investors are watching earnings results from major tech companies. Alphabet, the parent company of Google, kicked off a week for megacap tech earnings on a high note, surpassing analysts’ expectations with strong quarterly revenue growth driven by its cloud business.
However, not all tech giants shared the same fate. Chipmaker Nvidia's shares slid 8% in after-hours trading after its fourth-quarter revenue guidance fell short of investor expectations.
Among the other “Magnificent Seven” megacaps reporting this week, Meta Platforms and Microsoft’s figures were due later on Wednesday, followed by Apple and Amazon on Thursday. The outcome of these earnings reports will significantly influence the stock market’s direction in November.
On the economic data front, the preliminary reading of the US GDP is also due later on Wednesday. The report is expected to show a 3.1% annualised growth rate in the third quarter, marking the 10th consecutive quarter of expansion, reported Bloomberg.
At 10.45am, the JSE all share had lost 0.5% to 86,864.50 points, with major indices mixed, while the top 40 was down 0.54%.
At the same time in Europe, the FTSE 100 had lost 0.4%, France’s CAC 40 0.83% and Germany’s DAX 0.34%.
Earlier in Asia, the Shanghai Composite was down 0.61% and Hong Kong’s Hang Seng 1.64%, while Japan’s Nikkei added 0.96%.
In the commodities markets, gold gained 0.3% to $2,782.59/oz, while platinum lost 1.16% to $1,036.4/oz. Brent crude was 0.34% firmer at $71.24 a barrel.
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