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Daily Dose

Daily Dose

Good Morning,

On the wires…

  • Germany is ‘on the cusp of a recession’ due to Russia’s natural-gas squeeze and energy inflation
  • Twitter has already spent $33 million on its nightmare deal with Elon Musk
  • First grain shipments to leave Ukraine ‘this week
  • Judicial Service Commission recommends Hlophe’s suspension to Ramaphosa
  • Women’s Afcon earnings to form part of Banyana’s R9.2 million jackpot
  • All Blacks coach Ian Foster insists ‘no panic’ in camp ahead of Bok Tests

Quote of the day…

“Even an animal, if you show genuine affection, gradually trust develops… If you always showing bad face and beating, how can you develop friendship?” Dalai Lama

The indicators…

Currency crackdown…

The rand was able to extend its gains against the USD yesterday following last week’s higher than expected SARB rate. Market conditions were cautious ahead of the conclusions of the Fed’s policy meeting tomorrow, which saw the local currency posting a modest 5c gain to end the day at the 16.79 level. Overnight the rand was able to find some more gains with the rand reaching lows of 16.73 and opening up at 16.76 this morning. Locally we are dealing with current political issues and looming warnings by Eskom that loadshedding risk is high, however the negative sentiment would have been partly offset by President Ramaphosa announcing last night that the government would be easing the red tape around private sector power generation and that Eskom would be drastically its maintenance budget over the next 12-months.

With the US Dollar trading slightly weaker leading up to the Fed interest rate decision on Wednesday evening, with markets currently pricing in a 90% chance that Fed the would hike by 75 basis points. There is also an outside chance we could see a 100 basis-point hike, with markets pricing in that scenario at 10%. Regardless of magnitude of the hike, it’s still likely to another of many expected hikes unless the Fed starts to see inflation pressures ease and growth fears subside. Markets will also keep a close eye on Fed Chair Jerome Powell’s comments following the decision for some insight into future Fed decisions.

Looking elsewhere Asian markets traded higher ahead of looming US Fed hike with China’s economy showing signs of strength despite recent Covid and housing woes. On the commodities side gold is relatively flat with oil jumping on the back of recent Russia and Europe gas supply issues where Russia reduced its gas supply to Europe by 20% which could push Europe to switch to crude

On the radar…

  • US – New Home Sales
  • US – CB Consumer Confidence

Did you know?

In 1928, Olympic rower Bobby Pearce stopped mid-race to let a family of ducks pass, giving his opponent a 5-length lead. In the last 1,000 meters, Pearce pulled ahead by 30 seconds, winning the gold and setting a record.

Have a great day,

Keaton

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