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Cape Town - The rand was a touch softer in
range-bound midday trade on Wednesday as the SA and eurozone
manufacturing data failed to move the market.
"We were expecting slightly weaker manufacturing indices from both SA and the eurozone, so there was no impact on the market," a local trader said.
The SA Purchasing Managers' Index (PMI), which is a diffusion index measuring activity in the manufacturing sector, with 50 the breakeven level, dropped to 53.7 in April from 55.1 in March, 57.9 in February and 53.2 in January.
The eurozone PMI eased to 45.9 in April from 47.7 in March, 49.0 in February, 48.8 in January 2012 and 57.3 in January 2011. Germany's PMI was at a 33-month low of 46.2, while Italy was at 43.8, Spain at 43.5 and Greece at 40.7.
At 11:30 local time the rand was bid at R7.7372 to the dollar from its previous close of R7.7283. It was bid at R10.1589 to the euro from R10.2270 before, and at R12.5170 against sterling from R12.5305 previously.
The euro was bid at $1.3137 from its previous close of $1.3234.
RMB said in its morning commentary that it had been a positive start to the week, with good PMI figures from the US and China, a drop back in Spanish and Italian bond yields and the Dow hitting a fresh four-year high.
"The US ISM (equivalent to our PMI) manufacturing index's surge to 54.8 in April from 53.4 in March eased fears that the world's largest economy could be set for a 2011-style slump, suggesting that after a March and April siesta, the economy is accelerating again. We need a lot more data to confirm the outlook but in the unlikely event of a good non-farm payroll employment report on Friday, expect equities and the rand to rally hard.
"The new buzzword in town is growth. A wash of commentary suggests that austerity measures in Europe are self-defeating in that they are leading to economic contraction, which makes meeting the budget harder and therefore a possible spiral into oblivion. According to the new thinking, we need less focus on austerity and more on growth. Newly elected officials across Europe love the idea, the Germans hate it. The last word will go to the bond markets. So far the reaction has been surprisingly good: despite the two-notch downgrade on Friday and weak GDP data on Monday, Spanish 10-year yields have backed off aggressively from the 6% level. For all the negative talk, Spain is not collapsing.
"The data diary will heat up today, with PMI figures from those countries that were on holiday yesterday, Eurozone unemployment figures and US factory orders and ADP employment data. The calendar will become even busier as the week progresses, with the ECB meeting tomorrow, payrolls data on Friday, and the Greek and French elections on Sunday," the bank noted.
Markit said the headline Eurozone PMI has signalled contraction in each of the past nine months.
"The April PMIs also indicated that manufacturing weakness was no longer confined to the region's geographic periphery. The German PMI fell to a 33-month low, conditions deteriorated sharply again in France and the Netherlands also contracted at a faster rate," it said.
"We were expecting slightly weaker manufacturing indices from both SA and the eurozone, so there was no impact on the market," a local trader said.
The SA Purchasing Managers' Index (PMI), which is a diffusion index measuring activity in the manufacturing sector, with 50 the breakeven level, dropped to 53.7 in April from 55.1 in March, 57.9 in February and 53.2 in January.
The eurozone PMI eased to 45.9 in April from 47.7 in March, 49.0 in February, 48.8 in January 2012 and 57.3 in January 2011. Germany's PMI was at a 33-month low of 46.2, while Italy was at 43.8, Spain at 43.5 and Greece at 40.7.
At 11:30 local time the rand was bid at R7.7372 to the dollar from its previous close of R7.7283. It was bid at R10.1589 to the euro from R10.2270 before, and at R12.5170 against sterling from R12.5305 previously.
The euro was bid at $1.3137 from its previous close of $1.3234.
RMB said in its morning commentary that it had been a positive start to the week, with good PMI figures from the US and China, a drop back in Spanish and Italian bond yields and the Dow hitting a fresh four-year high.
"The US ISM (equivalent to our PMI) manufacturing index's surge to 54.8 in April from 53.4 in March eased fears that the world's largest economy could be set for a 2011-style slump, suggesting that after a March and April siesta, the economy is accelerating again. We need a lot more data to confirm the outlook but in the unlikely event of a good non-farm payroll employment report on Friday, expect equities and the rand to rally hard.
"The new buzzword in town is growth. A wash of commentary suggests that austerity measures in Europe are self-defeating in that they are leading to economic contraction, which makes meeting the budget harder and therefore a possible spiral into oblivion. According to the new thinking, we need less focus on austerity and more on growth. Newly elected officials across Europe love the idea, the Germans hate it. The last word will go to the bond markets. So far the reaction has been surprisingly good: despite the two-notch downgrade on Friday and weak GDP data on Monday, Spanish 10-year yields have backed off aggressively from the 6% level. For all the negative talk, Spain is not collapsing.
"The data diary will heat up today, with PMI figures from those countries that were on holiday yesterday, Eurozone unemployment figures and US factory orders and ADP employment data. The calendar will become even busier as the week progresses, with the ECB meeting tomorrow, payrolls data on Friday, and the Greek and French elections on Sunday," the bank noted.
Markit said the headline Eurozone PMI has signalled contraction in each of the past nine months.
"The April PMIs also indicated that manufacturing weakness was no longer confined to the region's geographic periphery. The German PMI fell to a 33-month low, conditions deteriorated sharply again in France and the Netherlands also contracted at a faster rate," it said.
