On the wires…
- Portugal reports more than 1 000 heat-related deaths
- China warns of ‘forceful measures’ if US House Speaker Pelosi visits Taiwan
- Europe’s mightiest river drying up amid record heatwave, causing shipping issues, deepening energy woes
- Eskom denies discouraging the switch to solar with possible R900 per month tariff
- Robbers steal guns, money during cash-in-transit heist in Soweto
- SA’s ODI magician Rassie hails ‘special day’ after stunning world champions England
Quote of the day…
“Today’s mighty oak is just yesterday’s nut, which held its ground” – David Icke
FXOne would like to thank Dave Gracey from Investec for his contribution to the crackdown this morning.
- Some thoughts on why the Rand is struggling to make any significant gains, even as the USD has given up about 2.7% over the last few sessions.
- Developed markets Central Banks are increasing their forecasts for rate hikes. The ECB has moved from a 25pip hike this week to potentially pulling the trigger on a 50-point move.
- The FED’s trajectory has moved from a probable 75 pip to a possible 100pip move.
- The SARB will have to decide between 50pips or 75 pips , but they will be conscious of growth.
- And then we have a litany of domestic factors that are affecting the currency in a negative manner.
- Load shedding – although the situation has improved a little, it seems that we are now in a situation where stage 2 will become the new standard. This has continued implications for growth etc.
- The President remains under pressure and there are concerns that the PhalaPhala scandal will have implications for his future.
- The ratings agencies have focused their attention on the municipal situation, threatening downgrades as many municipalities do not have the necessary funding for infrastructure development.
- The bond market is trading terribly, with yields trailing ever higher on lack of foreign demand, inflation fears and the domestic fiscal situation.
- And then of course commodity exports have slowed on the back of falling prices and declining demand from China.
- I don’t like the way that the ZAR is trading ….yesterday was an ideal opportunity for the ZAR to make up some lost ground.
- Equities rallied some 2%, the dollar weakened by 1%, which ordinarily would have been supportive for ZAR, and for a few minutes it did try, briefly trading below 17.00 to the USD, however it was a poor close and the ZAR actually weakened on the day.
- It has an ominous feel about it.
On the radar…
- All – Russia/Ukraine Crisis
- SA – CPI
- SA – Core CPI
- EU – ECB Interest Rate Decision Tomorrow
- EU – Current Account
- EU – Consumer Confidence
- UK – House Price Index
- US – Existing Home Sales
Did you know?
If California were its own country, it would be the fifth wealthiest country in the world
All the best,
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