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Daily Dose

Daily Dose

Good Morning,

On the wires…

  • Germany may restart coal-fired power plants if Russia cuts off its gas
  • Boris Johnson remains defiant as calls mount for his resignation amid Partygate scandal
  • Four bombs kill at least 11 in Afghanistan
  • SARS asks taxpayers to avoid its offices as strike gets under way
  • Expect to pay more for water and electricity in Ekurhuleni and Joburg
  • Verstappen heads to Monaco where Leclerc awaits a change of luck

Quote of the day…

“No man goes before his time—unless the boss leaves early.” — Groucho Marx

The indicators…

Currency crackdown…

After trading as low as 15.55/$ by midday yesterday, the rand gave back its gains to end the day higher at 15.73/$ after last night’s Fed meeting reiterated that it would probably hike rates by 50 basis-points in June and July. This was despite prior suggestions the Fed could look at an immediate slow down amid global growth concerns. Regardless of that, risk sentiment did get a bit of a lift, with the US dollar still hovering near a one-month low after the minutes also confirmed the potential for pause in rate hikes after the next two meetings. Atlanta Fed President Bostic had already suggested earlier this week that a pause might be the best course of action in September to monitor the effects on the economy.

Both Wall Street and European stocks rose yesterday as investors were lured by cheaper valuations, while long-term Treasury yields held steady. From a South African perspective, our government bonds endured a tough session yesterday – this surprised many with indicators suggesting that, if anything, bonds should have gained ground. Things are slightly this morning, with Asian stocks trading more mixed to low and European stocks looking set to open lower with investors reacting cautiously to the minutes.

Attentions will now shift to EU summit taking place next week with the focus will be the oil markets, where another attempt will be made to agree on an EU-wide embargo on Russian oil – we will have to wait and see how this impacts the euro. Oil advanced for a second session yesterday after US crude and gasoline stockpiles shrank further ahead of the American summer driving season. Gold pared losses after the minutes were in, yet stayed lower, having been down for most of the day on a stronger dollar. While gold is still considered a hedge against inflation, rate hikes have eroded its appeal as they tend to lift bond yields – raising the opportunity cost of holding the commodity.

On the radar…

  • All – Russia/Ukraine Crisis
  • All – Covid 5th Wave
  • All – World Economic Forum Annual Meeting
  • SA – PPI
  • US – GDP
  • US – Initial Jobless Claims
  • US – Pending Home Sales

Did you know?

Out of the 30 fastest 100m sprint times ever, only nine were achieved by an athlete not associated with doping.

All nine were run by Usain Bolt.

Have a great Thursday,

Kyle

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