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On the wires…
- Haiti gas truck explosion kills 62, injures dozens
- China warns US it will ‘strike back’ for ‘reckless’ sanctions
- US detects all-time high number of guns at airport checkpoints
- Three suspects to appear in court in R299 million tax evasion and fraud case
- SA off UK red list
- Man City rout Leeds with magnificent 7, as Villa win again.
Two cents worth…
The Dose will take a break from today until the 10th of January. Although the writers will be refreshing their writing skills, FXOne will still be in the office to assist with any payments or queries.
We would like to genuinely thank you for your brilliant support during a challenging 2021, and we look forward to sharing 2022 with you.
Enjoy the holiday, relax and spend time on the really important things in life- faith, friends and family.
“The best and most beautiful things in the world cannot be seen or even touched. They must be felt with the heart.”– Helen Keller
FXOne would like to thank Wayne Rosenberg for his contribution to the crackdown this morning.
Yesterday the rand had a reasonably quiet day, although it traded with a weaker bias throughout. After the JHB close, when US equity markets started looking wobbly, the rand did trade at a high of 16.16, before tracking lower in early morning trade. Riskier assets again look under the hammer, as the Fed meeting tonight will lay a path towards potential increased taper and higher interest rates. US PPI figures released yesterday, fuelled expectations of exactly that. The reaction of the US equity markets supports that view, with some of the “big Boys” (tech shares) taking some pain. The only thing holding a potential blow- out for emerging markets, is the continued spread of Covid and the potential impact it will have on global growth.
After looking at the above paragraph, the $ is only slightly stronger this morning, while Asian equity markets are mixed on Corona infection economic growth impact. Oil prices are lower for the same reason. Two conflicting market influences are adding to the present volatility and will do for the next while. How much the US Fed decision is presently priced into the rand, is the magical unknown? Gold is well lower. US 10 year Treasury yields are unchanged (Fed action priced in?), while the SA R2030 yield are nicely lower and seems to be tracking international bond movements. Bitcoin has made a decent recovery, but remains below the key $50 000 level. In that bunch, there is not a lot of rand supportive signals.
There is a lot of economic data out today, so no time to start relaxing before the “long” weekend. I am uncomfortable that SA is closed after the FOMC press conference, as limited liquidity might present a challenge for the rand. With all indicators suggesting earlier rate hikes and increased taper, we will need to hope that the FOMC are watching the spread of Covid and its potential impact on global growth. I don’t think so and the rand might have to wear a helmet going into an illiquid year end.
Although the does is not going to be in action, FXOne will be there. If you need assistance in understanding what is happening, give us a call to discuss.
On the radar…
- All – Omicron updates
- GBP- CPI and PPI
- US- Mortgage applications
- US- retail sales
- US- business inventories
- US- Fed interest rate decision
- US- FOMC press conference
- US- NY Empire State manufacturing
- SA- CPI and PPI
- SA- SARB quarterly bulletin
Did you know?
“Silent Night” is the most recorded Christmas song in history. It has had more than 733 different versions copyrighted since 1978.
Have a Merry Christmas and delightful New Year!
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