Morning report (8/6/04)

Local equity markets traded higher yesterday gaining more than 1% despite more bad news from Zim, which made the currency slide back against the majors.

Nico Kelder, economist at the Efficient Group reports that the weakening of the currency was partly a result of an announcement by Alan Greenspan (US Fed boss) which stated that interest rates will be increased sharply if necessary.

The currency lost 1.6% against the dollar and sterling while it lost slightly less against the euro - the dollar strengthened against the euro. The bond market reacted by weakening by 0.7%.

Commodity prices generally fell with oil down 2.6-percent. European and US markets traded flat yesterday while the markets in the Far East are trading mixed this morning.

We expect local equities to follow the currency while bonds will wait for the result of the MPC meeting tomorrow.