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Daily Dose

Daily Dose

Good Morning,

On the wires…

  • Spain’s PM says ‘more than 500 died’ from heatwave
  • Eight killed, 23 injured in Turkish attack on resort in Iraq’s Dohuk province
  • Putin warns natural-gas supply to Europe could fall further after key pipeline restarts today
  • Former Gauteng human settlements head arrested in R255m Free State asbestos corruption case
  • PowerBall player bags almost R100m after spending R150 on ticket
  • Semenya falls well short in bold bid at world 5 000m

Quote of the day…

“Dream as if you’ll live forever. Live as if you’ll die today.” – James Dean

The indicators…

Currency crackdown…

FXOne would like to thank Warrick Butler from Standard Bank for his contribution to the crackdown this morning.

It feels like I have been away for a month and yet it has only been a week. There isn’t much better than spending time lazing on a beach, in the sun with an ice cold cocktail and zero WiFi, to calm ones soul. Africa truly has some special places with incredible people. The bank’s old tag line “Africa is home” still has meaning, if only my home was as relaxing and warm as that little island east of Tanzania.

Coming back today it feels akin to walking the plank. Not sure whether its into the cold, shark filled coastal waters of the Cape, or the warm tropical waters of Zanzibar that I am going to be pushed today though. We have the ECB and the SARB rate meetings today with hikes expected at both meetings, but the quantum in unknown at this stage. The ECB is expected to hike by 25bps across the board (main, marginal and deposit rates) whilst the SARB is expected to hike by 50bps. If anything, I would hope that the SARB bucks the consensus view and hikes by at least 75bps, if not 100. My home loan won’t be happy but given the way inflation is accelerating almost in perfect correlation to the Rand and Bond’s, I think it’s time that the central bank tried to get ahead of the curve. We shall see at 15h30ish. Before then the Rand could have reacted quite a lot in relation to the ECB’s stance and so expect a fairly jittery/volatile day with liquidity poor as usual.

The Rand has been fairly range-bound in my absence with the 17.30/35 high proving tough still whilst the dips have also been shallow down to 16.95. I don’t expect this to change too much up until 14h15 local time and then all bets are off as we head into rate decision time. Local flow are still predominantly LHS and its really all about what the offshore investment community do that will determine the early morning direction.

On the radar…

  • UK – BoE MPC Member Pill Speaks
  • EU – ECB Interest Rate Decision
  • US – Initial Jobless Claims
  • US – Philadelphia Fed Manufacturing Index
  • SA – Interest Rate Decision
  • US – ECB President Lagarde Speaks

Did you know?

At a cost of over $150 billion, the International Space Station is the most expensive object ever built

Have a great day.

Nyiko

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