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Daily Dose

Daily Dose

Good Morning,

On the wires…

  • Germany declares natural-gas shortage after Russia throttled its supply over the Ukraine war
  • Supreme Court rules Americans have right to carry guns in public
  • US not keen on coal in backing SA’s $8.5bn climate funding deal
  • If power station protests persist, there’ll be much more load shedding, Eskom warns
  • Sergio Perez pleads with Red Bull to fix reliability issues after ‘painful’ Canadian GP
  • People have only 100 days left to use the paper £20 and £50 banknotes before they will no longer be in circulation

Cartoon of the day…

The indicators…

Currency crackdown…

The rand weakened yesterday as it continued to trade in a tight range amidst persistent market uncertainty. From an open at 15.91/$, the currency touched a low day’s low 15.90/$ before trading to a high of 16.05/$ and eventually settling at 15.95/$ – slightly off where we are trading this morning. The losses came on the back of depressed risk sentiment, with investors becoming increasingly concerned that the US is headed towards a recession, while a selloff in commodities amid growth concerns also weighed.

Elsewhere, the dollar fell against its major peers this morning, and is on track for its first weekly decline of the month as investors assess whether aggressive Fed rates are sustainable, with many fearing they could trigger a recession. Markets are currently pricing in a more cautious approach from the Fed after an expected 75 basis-point hike in July. On the data side, gauges of factory activity in Japan, Britain, the EU and US all softened in June, with US producers reporting the first outright drop in new orders in two years due to deteriorating confidence. In UK, Prime Minister Boris Johnson was blamed for a drop in consumer confidence yesterday, with his Conservative Party subsequently losing two by-elections, including a key seat in southeast England. While data released this morning showed that UK retail sales fell 4.7% year-on-year, as consumers cut discretionary spending as they struggled with soaring prices.

In other markets, European stocks are expected to open firmer this morning following a positive close in the US and as Asian stocks traded higher this morning. Oil prices have stabilised this morning after falling overnight, with traders having to balance concerns of falling demand on the back of slowing economic growth. Gold has also lost some ground, while copper – widely seen a s a leading indicator for economic output – dropped 3% in Shanghai and is now down 7% for the week. This is its sharpest weekly fall since the pandemic-driven selloff in March 2020.

On the radar…

  • All – Russia/Ukraine Crisis
  • EU – ECB’s McCaul Speaks
  • EU – EU Leaders Summit
  • UK – BoE Quarterly Bulletin
  • UK – MPC Members Speak
  • US – New Home Sales

Did you know?

The U.S. Navy’s submarine periscope controls used to cost $38,000 until 2017, when they realized that $30 Xbox controllers could do the job.

Happy Friday 

Team FXOne

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