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Daily Dose

Daily Dose

G Morning,

On the wires…

  • 1,000 pilots go on strike, forcing Scandinavian Airlines to cancel hundreds of flights
  • Chinese real-estate developers are accepting wheat and garlic for deposit payments as market slumps
  • Entire industries in Germany could collapse due to Russian natural-gas supply cuts
  • ANC NEC hears calls for state of emergency, moving power utility to energy dept
  • Govt confirms end of petrol subsidy as prices jump 11%
  • Wales prop out of Springboks series after horror head knock

Quote of the day…

“We generate fears while we sit. We overcome them by action.” Dr. Henry Link

The indicators…

Currency crackdown…

FXOne would like to thank David Gracey from Investec for his contribution to the crackdown this morning.

  • I haven’t written a currency comment for a while. There are not enough expletives in the English language to adequately describe what I and other South Africans are really feeling, and I don’t want to add to the negativity currently gripping the Country.  
  • Also, by the time 8Am rolls around I am too exhausted to find the energy (excuse the unintended pun) to write anything useful. This is because of the constant buzzing and pinging and whirring of all household appliances resetting during the night every time Eskom switches the power on and off, which is fairly frequent. My generator has developed a severe case of bipolar disorder as it tries to decide whether it’s coming or going. Much the same for my sleep patterns.
  • Things in our beloved country are not going well, and once again I reiterate that it’s not going to improve anytime soon. I’ve said this enough times over the last few years not to have to reiterate the causes and symptoms in daily commentaries.
  • When you carefully consider the macro picture in South Africa its surprising that the Rand hasn’t lost more ground.
  • We can thank the resource exporters for that, they remain very active. However, there are emerging risks that may change that dynamic.
  • A potential global recession is beginning to look likely, leading to a decline in demand for our exports. But that’s for another day.
  • In SA we are also likely to see growth decline even further as energy inflation eats further into discretionary spending power. The petrol price is doing much of the SARB’s job for them. They will be very conscious of GDP growth when deciding on the pace for future rate hikes.
  • In the short term the Rand will follow international risk signals and the quantum of export USD supply means that the market is probably long of the greenback as we speak.
  • However, the other side of the supply/demand coin is that sentiment is very poor and doesn’t look likely to improve anytime soon.
  • It would be a major surprise to me if the Rand was able to regain the 15 handle anytime soon.
  • Good luck.

On the radar…

  • All – Russia/Ukraine Crisis
  • SA – South Africa Standard Bank PMI
  • EU – Services PMI
  • US – Factory Orders
  • UK – Composite PMI
  • UK – Services PMI
  • UK – BoE Financial Stability Report
  • UK – BoE Governor Bailey Speaks

Did you know?

On average, Premier League footballers cover around 10km’s per game.

Have a terrific Tuesday,

Wayne

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