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Daily Dose

Daily Dose

Good Morning,

On the wires…

  • Oceans are hotter, higher and more acidic, climate report warns
  • Twitter lost three more top executives amid Elon Musk takeover drama
  • Microsoft announces changes after cloud computing complaints
  • South Africa moves ahead with plan to launch own satellite
  • SA Weather Service allocated R100m to ensure ‘state of the art’ forecasts
  • Wales coach accepts pressure as Springboks loom after Italy loss

Quote of the day…

“When we strive to become better than we are, everything around us becomes better, too“ – Paulo Coelho

The indicators…

Currency crackdown…

The rand opened this morning weaker than it did yesterday, relative to both the euro and the dollar. Now hovering around 16.06 per dollar and around 16.83 per euro, it seems that the rand is losing its attraction as an emerging market currency – or at least during this heavy risk-off period. The Rand strengthened as much as 15.89 yesterday before a late afternoon sell-off, after the US equity markets struggled. The S&P 500 as well as the NASDAQ each took 4% knocks during yesterday’s trading session, with cash seemingly taking preference.

This rand depreciation could also in part be due to the US Dollar Index inching upward over yesterday’s session – the dollar most definitely benefited from increased demand for safe havens as stocks sold off. Poor U.S. housing data yesterday added to economic slowdown concern, with housing permits contracting 3.2% on a month-to-month basis. The darkening outlook for the U.S. economy does always seem to support the dollar amongst other safe-haven currencies. From a UK perspective, the pound remained under pressure after falling 1.2% overnight, with Wednesday’s data exposing a UK CPI which grew 9% year-on-year.

This CPI growth is the highest in 40 years and adds to the ever-growing global inflation concerns. We now await South Africa’s interest rate decision later this afternoon, to see how we will deal with our own inflation concerns. Data released yesterday indicated that the annual change in CPI was 5.9%, unchanged from the March year-on-year results. This is the third time in five months that the annual rate was 5,9%, testing the 6% upper limit of the South African Reserve Bank’s monetary policy target range.

On the crypto front, a digital rand in South Africa could cut the high cost of cross-border payments for banks but its introduction is still a few years away, a senior central bank official said. Cryptocurrency markets were fairly quiet after last week’s turmoil. Bitcoin fell about 4% and was last trading around $29,000 while Ether fell 6% to slip below $2,000.

On the radar…

  • All – Russia/Ukraine Crisis
  • All – Covid 5th Wave
  • EU – ECB Publishes Account of Monetary Policy Meeting
  • EU – ECB De Guindos Speaks
  • SA – Interest Rate Decision
  • SA – Prime Rate
  • US – Initial Jobless Claims
  • UK – Existing Home Sales

Did you know?

Froot Loops are all the same flavour

All the best,

Kyle

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