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Daily Dose

Daily Dose

Good Morning,

On the wires…

  • Germany takes ‘bitter’ decision to fire up coal power plants as Russia chokes off natural gas supplies
  • ‘Crisis of food and drinking water’ – 26 more dead in India flood fury, waters recede in Bangladesh
  • China offers to mediate Horn of Africa disputes
  • Two dams in Nelson Mandela Bay metro have 6 days of water left as consumption spikes
  • Harith launches new R4.8bn fund to back renewable energy projects in Africa
  • Giggs resigns as Wales manager to avoid World Cup distraction

Quote of the day…

“It isn’t what you have or who you are or where you are or what you are doing that makes you happy or unhappy. It is what you think about it.” – Dale Carnegie

The indicators…

Currency crackdown…

The Rand had a relatively flat trading session yesterday with it sticking within a tight range of 15.97 – 16.06 against the US Dollar. Later in the afternoon Eskom announced we are back to stage 2 loadshedding which assisted in it retaining the levels above 16.00. Overnight, the Rand was able to test lower levels but was unable to hold on to any gains with the currency back above the 16 level against the US Dollar this morning. Investors will continue to watch international headlines for clues on future direction.

 

The US had a bank holiday yesterday which saw it trade slightly softer. All eyes remain focused on major central banks for further developments in curbing inflation. All present action has only pushed fresh investors’ concerns on slowing economic growth and potential recession. Markets now look towards US Fed Chairman Jerome Powell’s testimony to the Senate and the House on Wednesday and Thursday. In Europe, European Central Bank President Christine Lagarde stated they are looking to hike interest rates in July and September, despite growing concerns over financial-market tensions.

 

Elsewhere Asian markets are mixed with COVID-19 fears reigniting in China where we saw cases flare up in cities such as Shenzhen, which has created uncertainties on the second-largest country’s recovery path. US equity futures markets are well in the green which should support some riskier assets, including the rand. Looking at commodities, gold trades slightly weaker while oil rises on the back supply issues. SA foreign flows figures, showed net sales again last week for both the equity and bond markets, bringing the flows for the year to date to -R135 billion. The US 10 -year remains elevated, just below the 3.30% level, which indicates that the market might not be entirely happy with the level of interest rates just yet- trade cautiously and keep an eye on this.

On the radar…

  • All – Russia/Ukraine Crisis
  • EU – Current Account
  • US – Existing Home Sales
  • UK – BoE Member Speak
  • EU – ECB Member Speak
  • US – Fed Members Speak

Did you know?

The term ‘genuine leather’ doesn’t simply mean “real leather;” it refers to the lowest grade of all leather products that can technically be considered authentic.

Have a great day,

Keaton

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