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Daily Dose

Daily Dose

Good Morning,

On the wires…

  • Bill Gates says he has tested positive for Covid-19
  • Russian natural gas flowing to Europe via a key Ukraine hub are set to stop on Wednesday
  • Parliament’s health committee visits Cape Town hospital after shooting which claimed 3 lives
  • Two more arrests made in connection with mass murders in Khayelitsha, Cape Town
  • PGA Tour refuses to release players for Saudi-backed opener
  • Liverpool rally to keep Premier League title hopes alive

Quote of the day…

“Success is getting what you want, happiness is wanting what you get.” ― W. P. Kinsella

The indicators…

Currency crackdown…

The rand recovered some lost ground this morning to trade at 16.07/$ after trading as high as 16.27/$ in yesterday’s session, with the dollar taking a bit of breather from its rampant run these last few weeks.  There is very little in the way of local drivers impacting the currency at the moment with most investors simply focused on the dollar. For its part the dollar is slightly lower but still near a 20-year high against its major peers ahead of key inflation data due later today, which should signal how aggressive the Fed can be with monetary policy tightening. Expectations are for US CPI to ease slightly to 8.1% after rising to 8.5% in March, while markets are pricing in another hike of at least 50 basis-points at the Fed’s June meeting. However, a surprise to the upside for the inflation release could reignite talk of a 75 basis-point hike, which could then further extend the dollar’s run.

Elsewhere, the euro is slightly higher this morning as it continues to trade sideways after plunging to a 5-year low at the end of April, with the ECB also coming into focus after the Fed’s recent rate hike and with European inflation sitting at a record high 7.5% (almost 4x the ECB’s target). In response, ECB member Madis Müller in comments yesterday suggested that the central bank should outline its rate expectations for the upcoming months at its next meeting in June followed by a hike in July. He also added that the hike should be followed by several more this year to take the deposit rate, currently at negative 0.5%, back into positive territory by the end of the year. ECB member Isabel Schnabel and Bundesbank President Joachim Nagel, both influential figures on the rate-setting Governing Council, have also made the case for a July rate hike along with a number of other policymakers.

In other markets, Asian stocks followed the broader US index higher while European stock futures are pointing to a positive open this morning. Oil prices have dipped along with gold, while Bitcoin edged close to the $30,000 mark for the first time since July last year as a broad selloff in crypto assets continues.

On the radar…

  • All – Russia/Ukraine Crisis
  • All – Covid 5th Wave
  • US – Core CPI
  • US – Fed Member Bostic Speaks
  • US – Federal Budget Balance
  • EU – ECB President Lagarde Speaks
  • EU – ECB’s Schnabel Speaks

Did you know?

Benedict Cumberbatch was once kidnapped and put into the trunk of a car by six men with guns while he was filming a movie in South Africa

Have a great day,

Nyiko

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