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Daily Dose

Daily Dose

Good Morning,

On the wires…

  • Kremlin official suggests Russia could one day try to reclaim Alaska from the US
  • Metro ban for women without head coverings in Iran’s second city
  • UK ministers to tell Johnson to quit as PM – reports
  • Court orders former Eskom boss Brian Molefe to pay back R10 million to pension fund
  • Govt planning commission proposes emergency strategy to speed up new solar, wind plants
  • Sexton to lead Ireland against All Blacks despite concussion scare

Quote of the day…

“When all is said and done, more is said than done.”― Lou Holtz

The indicators…

Currency crackdown…

The rand has extended losses near its worst levels in 22-months against the dollar yesterday – just a day after breaking the 20-month record. All-in-all the currency gave up around 26c as it traded from an open at 16.54/$ to end the day at 16.80/$ as the dollar continues to go from strength to strength. Local factors have had minimal input in these recent moves, with the dollar running rampant on the back of expectations of aggressive Fed hikes and its safe-haven appeal in the face of global recession fears.

After rising 7% last year, the dollar has now risen an additional 12% this year against its G-10 peers which aren’t expected to hike rates as aggressively as the US, and as the EU continues to reel from the conflict in Ukraine. A recent Reuters poll expects to see the dollar continue its run for the next 3-to-6-months. Meanwhile, the release yesterday of the minutes from the Fed’s last meeting (where it hiked rates by 75-basis-points), pointed to the possibility of an “even more restrictive” monetary policy to prevent long-lasting inflation, with the central bank fearing that a failure to slow down inflation would erase faith in its ability to control it. Investors are currently pricing in another 75-basis point hike in July.

Focus will now switch the release of the ECB’s last meeting minutes, where policymakers decided that a rate hike of 50 basis points would be appropriate in July. Tomorrow US nonfarm payroll figures are expected to show that employers add 268,000 jobs. Elsewhere, oil prices regained some ground after steep losses in the last two sessions, as investors returned their focus to tight supplies despite fears of a global recession. Meanwhile gold lost its appeal in the face of a stronger dollar, falling over $20 in the process.

On the radar…

  • All – Russia/Ukraine Crisis
  • EU – ECB Member’s Speak
  • EU – ECB Monetary Policy Meeting Summary
  • UK – BoE MPC Member Mann Speaks
  • UK – Labour Productivity
  • US – Initial Jobless Claims
  • US – Trade Balance
  • US – Fed Member’s Speak

Did you know?

Arnold Schwarzenegger was paid approximately $21,429 for every word he said in “Terminator 2”

Have a great day,

Nyiko

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