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Daily Dose

Daily Dose

Good Morning,

On the wires…

  • Twitter is reportedly giving in to Elon Musk’s demand for its ‘firehose’ of internal data
  • New Zealand to price sheep and cow burps to cut greenhouse gases
  • No R350 grants were paid in April and May, Sassa admits
  • Senior Cogta official arrested in R6 million PPE fraud case
  • Ukraine beat Republic of Ireland after World Cup heartbreak
  • Wallabies to host Springboks at new stadium in Sydney

Quote of the day…

“Overcoming fear isn’t just about doing what scares you but having the courage to say no to the things you no longer want.” – Scott Allan

The indicators…

Currency crackdown…

The rand finally broke through the 15.30 per dollar mark yesterday – potentially opening up the gates for a move to R15. The dollar index has traded sideways over the last 24 hours, indicating that this move is down to rand strength rather than dollar weakness. This makes sense, with our rand appreciating against the three majors – opening 8 cents stronger against the euro and a noticeable 21 cents stronger against the pound this morning. The pound itself is down against the dollar as political risks and fears of a slowing economy finally weighed the sterling down – this was priced in yesterday after the confidence vote on British Prime Minister Boris Johnson earlier in the week.

News today is that the ECB will hand down its monetary policy decision later today and is expected to end its long-running bond purchase program. The euro has remained steady ahead of the meeting but is set to resume its slide unless a 50-basis point hike is implemented. The prospect of a 50-basis point rate hike has gathered steam in recent weeks following data showing that inflation hit a record high in May. The EUR/USD pairing rose 0.14% to $1.0715 in anticipation.

All three major US stock indices lost more than 1% as the 10-year US treasury yield climbed above 3% as inflation concerns simmered. This comes after oil prices struck a 13-week high, with the U.S. posting a record fall in strategic crude reserves yesterday. U.S. gasoline stocks also unexpectedly dropped, indicating a resilience in demand for motor fuel even during peak summer despite sky-high pump prices. Our SA top 40 only conceded 0.5%, however – potentially supporting the rand further. Gold is slightly down this morning as would be expected, having a negative relationship with treasury yields.

On the radar…

  • All – Russia/Ukraine Crisis
  • SA – Current Account
  • SA – Gold Production
  • SA – Manufacturing Production
  • EU – ECB Monetary Policy Statement
  • EU – Interest Rate Decision
  • EU – ECB Press Conference
  • US – Initial Jobless Claims

Did you know?

Norway is ranked as the country most likely to survive the imminent threats of climate change

Have a great Thursday

Kyle

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