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Daily Dose

Daily Dose

Good Morning,

On the wires…

  • Russian oil arrives in Cuba as Moscow finds alternative buyers for its shunned supplies
  • Sri Lankan president submits resignation via email after fleeing the country
  • US and Israeli leaders jointly pledge to deny Iran nuclear weaponry
  • Four suspected bank robbers arrested in Joburg CBD for allegedly impersonating cops
  • Transformed Wales eye stunning series victory in South Africa
  • Limping Tiger slumps to 6-over on Open return

Meme of the day…

The indicators…

Currency crackdown…

The rand gave up around 25c to the US dollar to end yesterday’s session at the 17.17/$ mark, with the dollar riding high on expectations that the Fed could hike rates by as much as 1% after inflation spiked to 9.1% on Wednesday. However, those expectations were dampened by comments from Fed Governor Christopher Waller and St. Louis Fed President James Bullard saying that they both favoured a 75 basis-point hike despite the inflation reading. Markets are now just pricing in a 36% chance of a 100 basis-point hike at the next Fed meeting this month – down from the 70% expected before the comments.

In Europe, the euro dipped as low as 0.9952 on the back of political turmoil after widely respected Italian Prime Minister Mario Draghi  (former ECB President) offered to resign after losing the support of one of largest political parties from his broad coalition government. However, his offer was rejected by President Sergio Mattarella and in the process averting a total collapse of the government. The currency has managed to trade back above but parity but is still struggling with a worsening energy crisis after Russia shut down a gas pipeline for regular week-long maintenance – markets are worried that it won’t come back online, with Russia saying that it would depend on demand and sanctions.

Risk sentiment took a further hit this morning with the rand weakening across the board after Chinese GDP dropped 2.6% in the last quarter compared with a revised 1.4% gain in the previous period – firmly highlighting the devasting impact covid lockdowns have had on its economy and raised doubts about the global recovery.

Oil prices edged higher this morning, but still looks set to end the week $100 a barrel for the first time since early April on concerns over a global economic slowdown. U.S. President Joe Biden will fly to Saudi Arabia later today, in an attempt to get the nation to pump more oil to lower prices. Apparently, it might be difficult to achieve with the majority of OPEC members running low on spare capacity.

On the radar…

  • All – Russia/Ukraine Crisis
  • EU – Trade Balance
  • US – Industrial Production
  • US – Fed Member Bullard Speaks
  • US – Core Retail Sales
  • US – Retail Sales
  • US – Import/Export Price Index
  • US – Michigan Inflation Conditions

Did you know?

Tigers have striped skin, not just striped fur.

Happy Friday,

Nyiko

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