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Daily Dose

Daily Dose

Good Morning,

On the wires…

  • Ramaphosa promises full government support to rebuild KZN while suspending some toll fees
  • Transnet boosts jet fuel supply as railway line repairs begin
  • Loadshedding escalated to stage 3
  • Banking Ombud cracks R19.5 million whip to force banks to protect customers more
  • Orlando Pirates reach CAF Confederation Cup final despite shock defeat
  • Ex Aussie cricketer Andrew Symonds dies in car accident aged 46.

Quote of the day…

“Don’t let the fear of losing be greater than the excitement of winning.” – Robert Kiyosaki

The indicators…

Currency crackdown…

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

This morning, poor Chinese economic data has led to a fresh bout of risk off sentiment and as a result we see the rand opening under pressure, although off its early morning highs. Industrial output and consumer spending were measured at their worst levels since the Covid outbreak began. Adding to the poor sentiment was the EU cutting their predictions for growth, while also doubling their inflation expectations. Comments from Goldman Sachs chairman, Blankfein, regarding a potential US recession has also added to the market disappointment. The facts are that inflation, higher rates and slowing growth are a reality and we will remain under pressure until we see inflation plateauing. We also need China to relook at their current Covid policy and then we might see some support for resources and commodities, and as a result, some respite for the rand.

Indicators: The $ has maintained its strong levels, while gold has lost some ground. Brent is marginally higher. US equity markets were well higher on Friday, but Asia is mixed this morning after the Chinese economic releases. All the US and European equity futures point to markets all opening lower today. The SA R2030 has opened higher this morning, at the 10% level, while the US 10-year Treasury yield has also kicked and is currency trading at the 2.91% level. Bitcoin continued its grim run and is trading just below the psychological $30 000 level.

We have the SA monetary policy committee meeting this week, with the interest rate announcement on Thursday. Consensus seems to support a 50-basis point hike, in the face of global inflation fears. All economic releases will have an impact on the rand. Volatility remains high and restrictive rand liquidity remains a concern. Tread carefully.

On the radar…

  • All – Russia/Ukraine Crisis
  • All – Covid 5th Wave
  • US – Fed Member Williams Speaks
  • UK – BoE MPC Treasury Committee Hearing
  • EU – ECB’S Panetta Speaks
  • EU – EU Economic Forecasts
  • EU – Trade Balance

Did you know?

The lighter was invented before the match.

Have a lovely week,

Wayne

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