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10/06/21 10:53
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The SARB warns of secondary sanctions following news that Putin to be granted diplomatic immunity for BRICS summit. Source: Bloomberg Forex Shares Diplomatic immunity South African rand South African Reserve Bank Shaun Murison | Senior Market Analyst, Johannesburg | Publication date: Wednesday 31 May 2023 What has happened? International Relations and Cooperation Minister Naledi Pandor has issued notice for the Diplomatic Immunity and Privileges Act to be granted to all international officials at BRICS-related events in South Africa. This notice has now been gazetted as of Monday the 29th of May and grants diplomatic immunity to Russian President Vladimir Putin to attend the upcoming BRICS (Brazil, Russia, India and South Africa) summit. The immunities provide immunity for all delegates (not just Putin) from personal arrest or detention. A warrant for Putin’s arrest In March this year, the International Criminal Court (ICC) issued a warrant for Putin’s arrest after investigations of war crimes in Ukraine. South Africa is currently a member of the ICC. The diplomatic immunity being gazetted could be in contravention with these international rules of law. Whether the immunity is or is not in contravention, or subject to a loophole thereto, the news certainly bodes poorly for sentiment regarding South Africa’s stance of ‘neutrality’ towards the ongoing Russian / Ukrainian war. This in turn could have a negative knock-on effect for foreign direct investment into the country which is reflecting in the rand which is trading at record highs against its major currency peers. A warning from the South African Reserve Bank (SARB) The SARB on Tuesday the 30th of May issued its Financial Stability Report (FSR). Within the report the central bank specifically made mention to the importance of South Africa maintaining its ‘neutrality’ stance. The position of ‘Neutrality’ was questioned recently after comments from a US ambassador to South Africa accused South Africa of supplying weapons and ammunition to Russia. While this matter is still under investigation, if true, would suggest a violation of US imposed sanctions on Russia by South Africa. US Treasury Secretary Janet Yellen, in her recent trip to South Africa gave strong mention that, ‘Violation of those sanctions by local businesses or by governments – we would respond to quickly and harshly and we certainly urge that there be compliance with those sanctions’ In the FSR report, the SARB flagged the following: ‘The events reported in the media and recent remarks by the US Ambassador to South Africa could change perceptions about South Africa’s neutrality, which could build up to a point where it triggers secondary sanctions being imposed on South Africa. Considered along with the recent Financial Action Task Force greylisting, the potential implications for the South African economy are severe, and the considerations from a financial stability perspective pertinent. Even in the absence of formal secondary sanctions, counterparts to South African financial institutions could put institutions under intensified scrutiny and decide to reduce their exposure to South Africa as part of their own risk management processes.’ When we contextualize the SARB commentary with the granting of diplomatic immunity to the Russian president, it certainly appears to grant little in the way of confidence for foreign investment. The rand The rand is currently dealing with a plethora of challenges domestically, ranging from the recent greylisting, the enormous burden of State-Owned Entities (SOEs) on the country’s fiscus, increased vulnerability in diplomatic ties, fragile economic growth and an escalating power crisis. This unfortunately has seen the local currency now depreciating to its worst ever levels in history against major peers such as the US, Euro and British Pound. USD/ZAR – technical view Source: IG Charts The USD/ZAR remains in a long-term uptrend (dollar strength / rand weakness) as the price trades within the upward channel and firmly above the 200-day simple moving average (200MA) (blue line). In the near term, the price breakout above the 19.50 suggests the short-term continuation of the longer-term uptrend. Channel resistance at 20.20 provides a possible upside resistance target as the price moves deeper into new high territory. -
The US debt ceiling deal has cleared the first hurdle, with the House of Representatives passing the bill to raise the ceiling. The deal now moves to the Senate, which is also expected to pass the measure, staving off a US default. Stocks in Asia made headway, and futures are pointing higher in Europe and the US. Meanwhile, in China, the Caixin manufacturing PMI sneaked back into expansion territory, allaying some of the fears about a broad slowdown in the Chinese economy. More PMIs next week, along with inflation and trade data, will provide additional insight into the Chinese economy. Expectations for a Fed move in June have dropped back sharply after vice-chair Jefferson said that he favoured 'skipping' a June hike, while softer CPI data in Europe have seen ECB tightening expectations drop too. Further eurozone inflation data is scheduled for today, along with the ADP report (delayed a day due to Memorial Day in the US), weekly jobless claims, the ISM manufacturing PMI and weekly crude oil inventories.
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By tradinglounge · Posted
United Parcel Service Inc., Elliott Wave Technical Analysis United Parcel Service Inc., (UPS:NYSE): Daily Chart, 1 June 23, UPS Stock Market Analysis: Looking for further downside into wave {c} to then complete overall correction in wave 2. UPS Elliott Wave Count: Wave {c} of 2. UPS Technical Indicators: Above 200EMA. UPS Trading Strategy: Looking for further downside into wave {c}, if we were to break north of wave (ii) we could see wave count invalidation. TradingLounge Analyst: Alessio Barretta Source : Tradinglounge.com get trial here! United Parcel Service Inc., UPS: 4-hour Chart, 1 June 23 United Parcel Service Inc., Elliott Wave Technical Analysis UPS Stock Market Analysis: Looking for downside into wave (iii) to start unfolding as we seem to be moving lower into wave iii. UPS Elliott Wave count: Wave iii of (iii). UPS Technical Indicators: Below all averages. UPS Trading Strategy: Looking for downside to start unfolding fast, otherwise we could be in a leading diagonal in wave (i).
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