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Daily Dose

Daily Dose

Good Morning,

On the wires…

  • ‘Green madness’ as dollars found at Argentina dump
  • Zelensky says Russia is waging a ‘gas war’ against Europe as Gazprom further restricts energy flows
  • Britain begins drought planning after record heatwave
  • SA may hit Chinese tyres with heavy import duties – that will drive up fares, warns taxi industry
  • Mpumalanga woman jailed for 10 years after stealing millions from employer for almost two decades
  • Water under the bridge as Proteas welcome back ‘fiery’ Rilee after six-year divorce

Quote of the day…

“You are today where your thoughts have brought you; you will be tomorrow where your thoughts take you.” – James Allen

The indicators…

Currency crackdown…

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

 

Current level: 16.8800/16.8900

Range yesterday: 16.6850-16.9700 and NY close: 16.9500

Nothing ever goes up in a straight line forever (unless we are talking about Turkish inflation) and likewise not much goes down in a straight line either (uhh……. Gravity). Ok never mind, but what I am referring to is that the Rand isn’t about to head to my target of 16.35/40 level in one foul swoop, although it is possible, it’s improbable. At 16.6850 given yesterday morning I was counting all my ships coming in and then at 16.9200 in the afternoon I watched the last of them sink in a matter of minutes. The exuberance of youth! After suggesting on Monday that the markets should trade within a holding pattern until after tonight’s Fed decision, what on earth got into my head? There was no ways it was going to scream lower with so much at risk tonight. To be fair the increase in rates by 75bps is pretty much a given, but it’s what he says afterwards that will give us more guidance on the future. Is inflation moving back below recession on the leader board of global economic woes or do we still have to buy brown bread for the next little while?

The SAGB bond auction went off swimmingly which suggests to me that investors are comfortable with the current level of risk after such a long sell-off. The 10Y benchmark 2030’s (ok 8 years now) have sold off from a year low of 9.02% to a high of 11.12% last week. At some point value is to be had. The Rand reacted inversely to the auction however and this was really those offshore people getting filled in the auction, hedging their investment through the FX market, with tonight’s Fed in mind. Makes perfect sense. I just wish I had figure that out before being so gung-ho. A bad day at the office however beats a good day in war-torn Ukraine, so I’ll take it.

I guess today will be another day of reflection and pondering whilst we await some US data this afternoon. So far this morning we have already seen Aussie CPI miss market expectations to the downside. Not many people care about Australia other than the Aussies, and some SA wanna-be expats, but it is still interesting to see a lower print bucking the general global trend. Is this the start ? Given my red-letter day yesterday I shall be most willing to keep it all tidy today. Resistance at 16.9500 should hold with 16.82 and 16.65 below that as minor support levels.

Good luck out there and have a good day ahead

Support levels – 16.80/85, 16.6800, 16.4800, 16.3500, 16.20/25

Resistance levels – 16.95/17.00, 17.1000, 17.2000, 17.30/35, 17.4500, 17.6200

On the radar…

  • US – Core Durable Goods Orders
  • US – Pending Home Sales
  • US – Fed Statement
  • US – Fed Interest Rate Decision

Did you know?

The tongue and cornea are the fastest healing parts of the human body.

All the best,

Kyle

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