SOUTH AFRICA: Ramokgopa Laments Eskom's Performance, PPI Data & SARB Speak Eyed
Mar-27 07:27
- African National Congress (ANC) Secretary General Fikile Mbalula said that negotiations with various parties are underway to make sure that the 2025 National Budget could be passed in parliament. The official also took a swing at the United States, accusing it of abusing its veto power in the United Nations Security Council (UNSC) to shield Israel from responsibility for its actions. On that note, the tone of articles reporting the official appointment of a new US ambassador to South Africa was rather pessimistic, with the Trump administration opting for conservative activist Leo Bozell III, who has no prior experience in Africa.
- Mybroadband reported that Eskom will again fail to reach its target of having an Energy Availability Factor (EAF) of 65%, which it was supposed to reach by the end of the previous financial year (31 March 2024). Energy and Electricity Minister Kgosientsho Ramokgopa complained that the utility has "dropped the ball" after several instances of loadshedding being implemented at short notice early this year.
- On a positive note, according to a BusinessDay report, South Africa was recognised as the leader in real estate data collection and regulation in the new Opacity in Real Estate Ownership Index, which marks an important step in its efforts to exit the Financial Action Task Force's (FATF's) greylist.
- South Africa's February PPI data will hit the wires at 09:30GMT/11:30SAST. Analyst consensus points to the likely acceleration in factory-gate inflation to +1.3% Y/Y from +1.1% prior.
- SARB Governor Lesetja Kganyago delivers the opening address at the central bank's biennial conference. Other MPC members will chair various panels of the two-day event.
- The SARB will release its Quarterly Bulleting at 08:00GMT/10:00SAST.
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BUNDS: Early Risk Off underpins Bund
Feb-25 07:22
- A mixed traded session for Bund, initially gapped higher overnight, it started to fade an hour ago, but went bid on the Cash open to trade near the Overnight high.
- Talk of increase German defence spending (€200bn) and continued Tariff threats from Trump have been doing the round overnight, but looking at multi cross assets, there's very little change overall.
- Still, the Risk Tone is to the downside, and Tech (chip) Stocks will be watched on the Equity Cash open, likely helping the underlying bid in Bund.
- The Opening gap in Bund would be down to 131.85, and as noted Yesterday, a drift towards 131.73, not a Tech level, would just represent a reversal of the French PMI miss.
- The resistance in Bund is at 132.60 (Monday's gap).
- If we look at the US Tnotes (TYH5 is still front), it is still trading at its highest level since mid December.
- Today only sees EU Wage rates, the main focus on the Data front will be on Friday.
- SUPPLY: UK 10yr Linker (won't impact Gilt), Italy €2.75bn 2027 (equates to 24.2k short 2yr BTP) could weigh, the 2036 Linker won't impact BTP, Germany €1.5bn 2053 (equates to 10k Buxl) could weigh. US sells $70bn of 5yr Notes).
- SYNDICATION: Spain 15yr Benchmark.
- SPEAKERS: Fed Logan, Barr, Barkin, ECB Nagel, Centeno, Schnabel, BoE Pill.
BUNDS: /SWAPS: Commerz Look For Eventual Debt Brake Tweak
Feb-25 07:22
Commerzbank write “the market's initial excitement may thus well give way to a more sober assessment that it will still be difficult to reform or circumvent the debt brake. At the end of the day, we also expect a deal to be struck, which could involve excluding investment from the debt brake formula, enshrining an extra budget for investment in the constitution or even declaring another state of emergency.”
- “Until this becomes clear, we expect major support in swap spreads to hold at the crucial 50bp mark in €STR-Buxl spreads, also considering the shaky risk-sentiment in U.S. equities.”
GOLD TECHS: Bulls Remain In The Driver’s Seat
Feb-25 07:16
- RES 4: $3000.0 - Psychological round number
- RES 3: $2974.5 - 2.0% 10-dma envelope
- RES 2: $2962.2 - 2.00 proj of the Nov 14 - Dec 12 - 19 price swing
- RES 1: $2956.2 - High Feb 24
- PRICE: $2938.2 @ 07:16 GMT Feb 25
- SUP 1: $2916.9 - Low Feb 21
- SUP 2: $2875.2 - 20-day EMA
- SUP 3: $2834.3 - Low Feb 6
- SUP 4: $2789.7 - 50-day EMA
A bull cycle in Gold remains in play and the yellow metal continues to trade at its latest highs. Fresh cycle highs once again confirm a resumption of the uptrend and maintain the bullish price sequence of higher highs and higher lows. Moving average studies are in a bull mode position too, highlighting a dominant uptrend. Sights are on the $2962.2, a Fibonacci projection. The first key support to watch is $2875.2, the 20-day EMA.
