What a week, and what a turn of fortunes for the Rand - as it all too quickly went from bad to worse following the collapse of Eskom's energy supply.

As the local government elections approached, it was not looking good for the ANC, as the Rand shot back over R15/$, and we saw Eskom suddenly push load-shedding to level 4.

We are now into the final leg of 2021, and all eyes are on what defining moments are yet to come that are going to define this year...

...and most of all, what is the Rand going to be worth by the time 31 December arrives?

Let's start with a full review, before we get into some views for the weeks ahead!

The biggest talking points for the week were as follows:

  • Eish-Kom Collapse - although Eskom has never been stable, this week really was a shock to all as we saw the load shedding escalate in no time to level 4...what next?
  • Local Elections - broken promises, corruption, ideas never becoming reality, lack of action and more all mark the ANC's performance in local government...will anything change at these elections?
  • Biden's Spending Bill - more spending, more debt, more liberal agendas were the order of the day for Biden's Democratic party, as he fought to get his enormous spending bill through
  • Economic Updates - economic figures become all the more important toward the end of year as we start to see the 12 months defined for good or for bad for each country...

So to start with the Rand, we saw it opening up around R14.85 to the Dollar, having already lost some ground into the end of the previous week.

And the Rand actually started off the week in top form, with a happy Monday seeing the local unit push toward R14.60, eventually reaching the level by the following day...

...but that was as good as it got, as the tables turned following the Eskom disaster reigniting.

But before this week had even begun, we must start with our forecast from Friday, which came before any of this…

...issued on 22 October, our prediction showed the Rand sitting at R14.82, with the expected trend for the USDZAR to push all the way into the R15.11-15.40 area. This was our Short Term Forecast, expected to take place over the course of the following days. (see below - click to enlarge)

So this was issued out to our subscribers previous week Friday, giving them the outlook for the days ahead.

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To get back to the Rand, our subscribers did not have to wait very long to see this move start to play out following the Eskom news...

...by Tuesday close, we were back at R14.85

...by Wednesday close, we were back over R15 to the Dollar

...by Thursday close, we had broken into the target area

...and by Friday, the USDZAR was touching over R15.30, the EURZAR over R17.85 and GBPZAR over R21.10!

The week had crumbled into a mess, and Eskom had been the trigger. Tuesday brought news of stage 2 load shedding, which quickly became stage 4, before some respite by the end of the week, with load-shedding due to end on Friday.

These had been caused by "pure negligence" according to reports from Eskom - another example of the unbelievable inability from the power provider to keep the lights on.

And this is largely the fault of the ANC and it's own cronies, while Ramaphosa promises that "If you don't vote ANC, electricity may never be restored" - when he himself and the party is the reason these very issues exist!

Anyway...in other news:

  • Monday is the big day for those elections that Ramaphosa is referencing, with local municipality and government elections taking place. It will be a holiday across the country, as voters go to the polls. The ANC will be looking to hold and gain ground, while the DA will be looking for voters to decide they actually want a change - and other parties will look to see what they can achieve on a smaller scale. Will the voters once again choose the party of broken promises, even after the riots and looting earlier this year?
  • Over in the US, Biden has been doing his utmost to push through the enormous approximately $1.8 trillion spending bill, but he continues to have to keep fighting even within his own party to try get this passed. He pleaded with House Democrats on Thursday to embrace his “framework” but by Thursday night, House leaders had scrapped plans for a vote on the public works measure, and the chamber approved a short-term extension of transportation programs through early December, a sign that passage of both the infrastructure bill and the domestic policy plan may be far off.
  • Then in economic news, we had a number of releases. US GDP increased 2% in Q3, a slowdown and not matching expectations. All signs are pointing toward the recovery slowing, and you can understand why… Supply chains are a mess, commodities are sky-high, while personal income has declined. Headline inflation rose at 4.4% annual rate since September, while Core Inflation has increased 3.6% for 12 months, the fastest pace in 30 years, and now consistent for 2 months. Jobless claims came in as expected at 281k. As we started with, we are in the defining months of the entire year - and right now, it isn't looking pretty!

To get back to the Rand, we saw the local unit pull back a little ground to close the week off:

But on the whole, this week had been nothing short of a trainsmash, as the ZAR ended around R15.25 to the Dollar...!

However, you could have seen it all coming - before the Eskom news, before economic news, before anything.

Our Elliott Wave based forecasting system had called it again!

And that was the wrap…

The Week Ahead (1-5 November 2021)

And just like that, we are into November!

This week is a big one, with SA's local elections taking place today, followed by the Mid-Term Budget Speech later this week. Of the two, the Mid-Term Budget is generally the biggest of the triggers.

Below is a short rundown of what we are watching this week - but bear in mind that what we will really be watching is the Elliott Wave based forecasting system which called all of the moves over the course of last week.

Regardless, triggers do move the market, so here is what we are watching, with the US lining up some massive ones as well as what is happening locally:

  • SA - Local Elections, Budget Speech
  • US - Interest Rate Decision, Fed Press Conf., Jobless Claims, Balance of Trade, Non-Farm Payrolls, Unemployment Rate
  • UK - BoE Interest Rate Decision

So plenty to keep the markets on their jittery toes, as it promises to be another humdinger of a week!

To get a look at the latest forecasts, use the link below:

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Look forward to hearing from you.

To your success~

James Paynter

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