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Daily Dose

Daily Dose

G Morning,

On the wires…

  • Ukraine’s drones are becoming increasingly ineffective as Russia ramps up its electronic warfare and air defences
  • Indian gangs are ‘fake-killing’ people to claim life insurance pay-outs, report says
  • SA conspiracy communities ‘targeted’ by Putin propaganda against ‘global famine’ criticism
  • Three poachers caught after allegedly killing 4 rhinos in Kruger National Park
  • Boks scrape through against Wales in thriller
  • Carlos Sainz savours maiden F1 win in ‘amazing’ British GP

Quote of the day…

“The future starts today, not tomorrow” – Pope John Paul II

The indicators…

Currency crackdown…

FXOne would like to thank Wayne Rosenberg for his contribution to the crackdown this morning.

Last week was a tough week for the rand (and for S Africans- no electricity), as it capitulated and gave up approximately 70c against the $. Although, it has opened slightly better than the highs on Friday, it feels as if we are sitting on the edge of a precipice. Local pessimism, a stronger $, weak equity markets, persistent inflation, increasing rate profiles and a potential recession to come, have added to the challenge that the currency faces. In saying that, how much of the negativity has been priced in? Inflation maybe, higher interest rates possibly but the coming potential recession is going to make sure that volatility continues. Every growth figure is going to add some spark on future global market direction. For emerging markets and commodity producers, we might even catch the double whammy, as low growth potential will have an expected impact on commodity demand and prices. The rand demise over the last week has been uncomfortable. Eskom was undoubtedly a contributor to the misery and continues to be essential in trying to provide some stability. If we see any increased Stage 6 planning or a higher stage announcement, the local currency is going to find it difficult to remain below the 17 handle. Not pretty, but holding thumbs is not an investment plan!

This morning, we see Asian equity markets neutral. Activity should be limited as its Independence Day in the US. The US markets will be closed but the equity futures markets are slightly lower. Future rate indicator- the US 10-year yield- is trading below the 3% level again at 2.88%, while the SA R2030 is also off its recent highs. The $ continues to trade stronger and parity talk to the Euro, has started again. Gold is trading higher, while Brent seems to have bounced, assisted by shutdowns in Libya. Bitcoin is under pressure again, as it hangs just below the $20 000 level with all crypto trade traders wondering if we are not set for another technical move lower. Indicators are mixed and not giving any clear clues to immediate market direction.

The rand has been here before and faced similar pressures. Although local factors have kicked in and added to global economic pressure on riskier assets, investors at a point will return in their search for yield.

On the radar…

  • All – Russia/Ukraine Crisis
  • EU – PPI
  • EU- Sentix Investor confidence
  • US – Independence Day
  • EU – ECB speakers

Did you know?

A 2007 study found that surgeons who played video games for at least three hours a week made 37% fewer mistakes

Have a good week,

Wayne

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