SOUTH AFRICA: Eskom’s Turnaround Dragged by Building Municipal Debt
- Ramaphosa has made minor changes as part of a cabinet reshuffle with Thembi Simelane moved from Justice to Human Settlements, while Kubayi moves from her position as Human Settlements Minister to become Minister of Justice and Constitutional Development.
- Eskom’s turnaround plans have been jeopardized by the further build in municipal debt costs, casting a shadow over the recovery in the utility. Eskom executives cite municipalities failing to pay their full dues, or failing to pay at all. They see the situation deteriorating further this year, with bigger metros joining municipalities in failing to pay their bills.
- The South African Chamber of Commerce have stated South Africa needs to stop finding excuses for economic underperformance, and that South Africa is struggling to “bed down its recovery program”. The group cite the success of Operation Vulindlela to loosen economic hurdles, however these measures may not be enough to tackle unemployment, poverty and inequality.
- Data and speakers are few and far between Friday, with focus likely on the US jobs print set for later today.
Want to read more?
Find more articles and bullets on these widgets:
Historical bullets
AUDUSD TECHS: Bearish Price Sequence
- RES 4: 0.6852/6889 High Oct 4 / 3
- RES 3: 0.6762 High Oct 9
- RES 2: 0.6689 50-day EMA
- RES 1: 0.6645 Intraday high
- PRICE: 0.6643 @ 07:25 GMT Nov 6
- SUP 1: 0.6513 Intraday low
- SUP 2: 0.6508 Low Aug 8
- SUP 3: 0.6490 76.4% retracement of the Aug 5 - Sep 30 bull leg
- SUP 4: 0.6472 Low Aug 6
A bear cycle in AUDUSD remains intact and today’s sell-off has reinforced this condition. The pair has traded through support at 0.6537, the Oct 30 low and bear trigger. This confirms a resumption of the downtrend and sights are set on 0.6490, a Fibonacci retracement point. Clearance of this level would reinforce a bearish theme. Initial firm resistance has been defined at 0.6645, today’s intraday high.
FOREX: MXN, Trade Proxies Hardest Hit, While Single Currency Suffers
- The dollar's election-tripped rally has put the USD Index at a fresh multi-month high, clearing 105.00 for the first time since early July. This makes for the largest one-day rally in the dollar since April (when a particularly hot CPI print prompted a surge in front-end rates).
- Outside of the USD, unsurprisingly the MXN is the poorest performer globally - off well over 3% and leading the weakness across EM currencies, as those with keen exposure to tariff risk and international trade conditions also trade offered (HUF, ZAR similarly weak).
- Among G10, EUR weakness pervades and while the single currency is just off lows, EUR/CHF has made a notable break lower - narrowing the gap with support of 0.9333. The break lower in EUR/USD and the low print of 1.0720 saw a solid uptick in volumes - suggesting some decent support ahead of the 1.07 handle. Weakness through here opens 1.0666 as the next major level.
EQUITY TECHS: E-MINI S&P: (Z4) Rally Exposes Key Resistance
- RES 4: 6012.75 1.00 projection of the Aug 5 - Sep 3 - 6 price swing
- RES 3: 6000.00 Psychological handle
- RES 2: 5961.00 1.00 projection of the Sep 6 - 17 - 18 price swing
- RES 1: 5927.25 High Oct 17 and bull trigger
- PRICE: 5914.00@ 07:07 GMT Nov 6
- SUP 1: 5816.41/5724.25 20-day EMA / Low Nov 4
- SUP 2: 5675.25 Low Sep 18
- SUP 3: 5637.60 38.2% retracement of the Aug 5 - Oct 17 bull cycle
- SUP 4: 5600.25 Low Sep 12
S&P E-Minis have recovered from their recent lows. A key short-term support has been defined at 5724.25, the Nov 4 low. Price is trading above both the 20- and 50-day EMAs and a continuation higher would expose the key resistance and bull trigger at 5927.25, the Oct 17 high. Clearance of this level would confirm a resumption of the primary uptrend. On the downside, a breach of 5724.25 is required to reinstate a bearish threat.
