The South African rand strengthened in early trade on Monday ahead of the release of local manufacturing purchasing managers’ index (PMI) and vehicle sales data for July.
• The rand traded at 16.4650 against the dollar, up 0.6% from its previous close, as of 07:02.
Manufacturing data anticipated
• The Absa PMI survey, due at 11:00, is expected to provide fresh insight into manufacturing conditions in Africa’s most industrialised economy.
• South African manufacturing sentiment deteriorated in June as weaker demand weighed on new orders, although lower oil prices boosted confidence about future business conditions.
Vehicle sales to show consumer demand
• Investors will also focus on vehicle sales data, due at around 14:00, which will offer a snapshot of consumer demand for big-ticket items after sales rose 15.3% in June.
• Nedbank economists forecast vehicle sales growth to moderate to 9.2% in July, primarily due to the high base reached last year and a less supportive economic backdrop.
• “Even so, sales are expected to remain robust at 56,247 units, underpinned by the lagged effects of interest rate cuts and the availability of affordable imported models,” they said in a note.
Government bond market update
• South Africa’s benchmark 2035 government bond was weaker in early deals, as the yield rose 2.5 basis points to 8.605%.
- The South African rand strengthened 0.6% to 16.4650 against the dollar in early trade on Monday.
- The Absa PMI survey is due at 11:00, expected to offer insights into manufacturing conditions after a deterioration in June.
- Vehicle sales data, due around 14:00, will indicate consumer demand following a 15.3% rise in June.
- Nedbank economists forecast July vehicle sales growth to moderate to 9.2%, with an expected 56,247 units sold.
- South Africa's 2035 government bond yield rose 2.5 basis points to 8.605% in early deals.
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• Investors will also focus on vehicle sales data, due at around 14:00, which will offer a snapshot of consumer demand for big-ticket items after sales rose 15.3% in June.
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• "Even so, sales are expected to remain robust at 56,247 units, underpinned by the lagged effects of interest rate cuts and the availability of affordable imported models," they said in a note.
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