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Daily Dose

Daily Dose

Welcome back from the Dose,

On the wires…

  • Compliments of the New Year!
  • Family, friends mourn as death toll rises to 10 in Brazil cliff fall tragedy
  • ‘Amazing milestone’ as NASA fully deploys Webb telescope in space
  • R44 closed to traffic as firefighters battle blaze in Kleinmond in the Western Cape
  • SA stands to benefit as construction of world’s largest telescope gains ground
  • Aussie Smith shatters mark to win PGA Tournament of Champions

Quote of the day…

“New Year is the glittering light to brighten the dream- lined pathway of future.”– Munia Khan

The indicators…

Currency crackdown

FXOne would like to thank Wayne Rosenberg for his contribution to the crackdown this morning.

 

The moves since we last reported, 15 December, are listed above as the change. The most interesting or noticeable moves are:

  • a softer $,
  • higher oil prices and
  • another 2% gain for the DOW and 3% by the TOP40

The rand has made gains against the $, although in massive volatile trade, seeing a top of 16.08 and a bottom of 15.51 during the absence of the dose. These levels were almost seen in the same trading session, thanks to the massively volatile Turkish Lira. The take on the market right now, despite the stronger rand is that the US will increase rates sooner, as well as increase taper in a effort to halt inflation. The reference to transitory inflation has disappeared and central bankers are now determined to act against inflation. The continued increase in the price of oil has not assisted with this, and the market expectation of higher rates is demonstrated by the US 10 Treasury yield which has ballooned from 1.45% when we took a break, to an elevated 1.76% this morning. This will remain the central theme of the market for the next while.

On the currency side, the gains of the rand against the $ and Euro are noticeable and a relief, but the rand has struggled against the GBP. The GBP has strengthened against the USD from 1.34 to 1.36 in the holiday period. Bitcoin has taken a smack and has lost 12.83% while we were tanning. With the volatility of crypto’s that fall can be undone in a couple of trading sessions, but a break below the $40 000 level might lead to a further correction lower.

This week we have some “big hitter” figures. US inflation will be released mid-week (expected 7%) which will attract massive interest and give us a clue to the potential timing of US interest rate hikes. We will also have jobless claims and retail sales on Thursday, which will keep the pressure on. Jerome Powell and Fed member chatter might also cause moves. Locally, market expectations are for a interest rate hike in January which is giving the rand some limited support in a reportedly poor liquidity trading environment. With the return to work for most, let’s hope the grid can take the pressure.

On the radar…

  • All – Omicron updates
  • EU- Sentix investor confidence
  • US- wholesale inventories
  • SA- vehicle sales
  • EU- unemployment rate
  • US- inflation on Wednesday

Did you know?

Mexicans celebrate New Year’s Eve, by eating a grape with each of the twelve chimes of a clock’s bell during the midnight countdown, while making a wish with each one.

Have a great 2022

Wayne

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