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Daily Dose

Daily Dose

Good Morning,

On the wires…

  • UK to offer monkeypox vaccine after 793 confirmed cases
  • Ukraine deploys heavy German artillery as US official arrives to discuss prosecution of war crimes
  • No more masks in classrooms? Unions express relief, but also fear amid overcrowding and flu season
  • After slow progress SA races the clock for COP billions plan by November
  • Boks forced to wait on English-based stars as clubs enforce World Rugby’s Regulation 9
  • Serena makes winning return in Eastbourne doubles after year out

Quote of the day…

“Tell me and I forget. Teach me and I remember. Involve me and I learn.” – Benjamin Franklin

The indicators…

Currency crackdown…

After trading as low as 15.84 late during yesterday’s session, the USD/ZAR pairing has shot back up to the 16.00 mark this morning. This is off the back of a general dollar gain, with investors continuing to revert to the safe-haven dollar. Although they have since pulled back slightly, US treasury yields were also up yesterday – adding to the attraction. Incidentally, US existing home sales fell 3.4% in May, the lowest level in almost two years. We all know how indicative the housing market can be – we are already seeing how high prices and a surge in mortgage rates are stifling demand. From a euro perspective, the EUR/USD pair sits around 1.047 while the EUR/ZAR pair continued to bounce between the 16.70-16.90 range – as it has for the whole week so far.

Investors are continuing to assess how worried they need to be about central banks pushing the world economy into recession as they attempt to curb red hot inflation. That being said, both the Dow Jones and the S&P 500 benchmarks each gained over 2% overnight on the possibility that the economic outlook might not be as dire as thought last week – when the S&P 500 logged its biggest weekly decline since March 2020. It will be interesting to see if these indices are able to hold onto this vote of confidence throughout today’s session.

Wednesday’s main event is the start of U.S. Federal Reserve Chair Jerome Powell’s two-day testimony to Congress, with investors looking for further clues about whether another 75-basis point rate hike is on the cards at the fed’s July meeting. UK have just announced a whopping 9.1% inflation, while await our local inflation data today – which should give us an idea of our own future interest rate decisions.

On the commodity side, oil has lost a noticeable 4% of value overnight – down to $110 a barrel. Investors seem to be taking global growth concerns and President Biden’s call for a tax holiday on gasoline into consideration. Gold continues to edge down, losing a further 0.38% last night – as interest rates continue to creep up. Bitcoin, as a ‘crypto commodity’, continues to be offloaded and is now flirting with the $20,000 mark, as the risk appetite of investors continues to weaken in this current climate.

On the radar…

  • All – Russia/Ukraine Crisis
  • EU – ECB Members Speak
  • EU – Consumer Confidence
  • US – Fed Chair Powell Testifies
  • UK – House Price Index
  • UK – BoE Members Speak
  • SA – CPI

Did you know?

Microsoft offered Yahoo $44.6 billion for their entire company in 2008, but Yahoo declined. Yahoo ended up selling to Verizon for $4.8 billion in 2016.

All the best,

Kyle

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