Gapex Morning Gut Feel Report 16th of November

1. Markets take a breather
2. ZAR Recovers
3. Fin Min Gordhan to be charged, Shaun Abrahams under pressure.

Markets seem to be taking a breather following the initial reaction to the Trump election victory. Yesterday saw emerging market index rise off its four month lows, bonds recover modestly off their lows and currencies claw back some lost ground. The ZAR’s increased volatility and sensitivity to EM sentiment means that as it led EM currencies in depreciation, it is also one of the best performing currencies in recovering once more. Today’s retail sales data that will be released by Stats SA is expected to show how the consumptive sectors of the SA economy are under pressure and how the SA economy as a result, is far more balanced and less vulnerable to a sell-off. Remember, that the weaker the consumptive demand within the economy, the greater the probability that the ZAR will find some support in the weeks and months that follow as the imported component of the trade and current account moderate. Although the risk of a credit ratings downgrade remains ever present and there are rumours that Fin Min Gordhan will be charged again. President Zuma calling for NPA head Abrahams to give reasons as to why he should not be suspended, there appears to be some accountability being forced on to those that have abused positions of authority. Trading Range: 14.0000/14.3500.

USD/ZAR Hourly Candle

The market appears as though it still wants to correct, but I would look to buy from R13.95 – R13.75 for a ST rally.

“Intellectual capital will always TRUMP financial capital.”

– Paul Tudor Jones

USD/ZAR Daily Close

This has been a wicked rally of epic proportion off the back of what we already knew on Wednesday.

My best advise would be to stay out as this is just to volatile and still range bound in the greater scheme of things.

“As in trading and life, very few things are ever as they seem” – Anonymous