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Daily Dose

Daily Dose

G Morning,

On the wires…

  • Dozens of Ukrainians feared dead after Russian bomb hits a school where 90 people were sheltering
  • SpaceX’s president predicts people will reach Mars within a decade and land on the moon sooner
  • Taliban orders Afghan women to veil their faces – if they don’t comply, male relatives face punishment
  • Six killed in yet another mass shooting in Khayelitsha, Cape Town
  • Verstappen wins F1 in Miami
  • Homa outduels Bradley to win PGA Wells Fargo title

Quote of the day…

‘’Change is the law of life – those who only look to the past or present are certain to miss the future’’ – John F. Kennedy

The indicators…

Currency crackdown…

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

On Friday, the rand traded in a 15.94- 16.17 range, closing closer to the bottom of that range. The rand enjoyed some assistance from a slightly weaker $ on the day, but since the Friday JHB close, the $ has made a comeback. This is after US non- farm payrolls figures showed robust employment number growth, with higher year on year hourly earnings. The market opens on the backfoot this morning, as risk aversion continues to dominate the market. Investors seems to be looking at the higher yields available in the markets, at the expense of the equity market. As a result, Asian markets are lower this morning with US equity futures prices pointing at a lower opening. US monetary policy, inflation pressures, China Covid crackdown and general economic slowdown are all adding to the present pessimism.

Other indicators: Brent and gold have maintained Friday’s levels, while the $, after having a roller coaster ride is marginally higher against the basket, but slightly weaker against the Euro. The US 10-year Treasury yield is higher again (3.14%), while the SA R2030 (10.14%) is almost unchanged. The $ and 10 UST yield need to lose their combined strength, and then we might see the rand enjoy some respite. We do have US inflation figures out later in the week, The US 10 year seems to reflect that there are still concerns that the figure might again be higher, than the previous release, although the consensus shows slightly lower (8.1% year on year). If unchanged or higher, talk of a greater than 50basis point hike from the Fed might again put pressure on the rand. Bitcoin has also suffered on the back of widespread risk aversion.

All will continue to assess developments that will impact the above-mentioned lead indicators, but US CPI on Wednesday will be a mover. Volatility remains elevated, liquidity remains a challenge. Keep both hands on the wheel.

On the radar…

  • All – Russia/Ukraine Crisis
  • All – Covid 5th Wave
  • US – Fed Member Bostic Speaks
  • EU – Sentix Investor Confidence
  • SA – Business Confidence
  • UK – BoE MPC Member Saunders Speaks

Did you know?

Canada still has 91% of the forest coverage that existed at the start of European settlement

Have a lovely week,

Wayne

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