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Daily Dose

Daily Dose

Good Morning,

On the wires…

  • Zelensky hopes UK’s Johnson doesn’t ‘disappear’ from politics
  • McDonald’s says cutting off its Russian business has actually improved its operating profitability
  • Biden says he is ‘feeling great’ after testing negative for Covid-19
  • Another student found dead in North West University residence
  • 5 suspected armed robbers killed in shootout with KZN police on N2
  • Stubbs sparkles, bowlers belted as Proteas fall in opening England T20

Two cents worth…

“If you’re waiting until you feel talented enough to make it, you won’t” – Criss Jami

The indicators…

Currency crackdown

As was to be expected, the rand traded relatively flat throughout yesterday’s session – as investors cautiously anticipated the Fed’s interest rate decision later in the evening.  USDZAR traded between 16.83 and 16.92 throughout the day, ending the local session around the lower end of the range. A 0.75% hike was implemented as per expectations – what was most interesting however, were comments from Fed Chair Jerome Powell that depending on new data, the central bank will likely slow the pace of future increases while it assesses the short-term impact of recent monetary tightening. US GDP figures being released later today will indicate if the US economy meets the definition of a technical recession, by posting two straight quarters of contraction. This seemingly less hawkish approach by Powell has undoubtedly dampened the dollar, as reflected by a sharp drop in the dollar index to 106.10 – from 107.07 this time yesterday.

Relative to the rand, we saw a massive 20 cent swing in our favour during the overnight session, most likely in reaction to Powell’s comments, rather than the interest rate decision. We now seem to be settled around the 16.65 level to the dollar this morning. The rand also opened around 10 cents stronger against both the euro and the pound this morning.

On the stock market front, quarterly earnings are being released thick and fast – the Dow Jones has gained 1.37% since yesterday while the SA Top 40 inched down by 0.05%. Companies like Nestle, Shell and Orange posted better than expected earnings, while the world’s largest brewer (Anheuser Busch Inbev) reported that consumers not only absorbed the higher prices, but actually drank more in the last quarter – a sign of the times!

Oil extended gains after a big drawdown from US crude inventories was exposed, while the prospect of a slower pace of interest-rate hikes from the Federal Reserve (Fed) filtered through markets. This buoyed commodities like gold and has potentially provided the rand with some support. Bitcoin surged around 8% to reach $23,081.18, as the market recovers some risk appetite.

On the radar…

  • SA – PPI
  • US – GDP
  • US – Initial Jobless Claims
  • US – Fed Chair Yellen Speaks
  • SA – PPI
  • US – GDP
  • US – Initial Jobless Claims
  • US – Fed Chair Yellen Speaks

Did you know?

Eminem’s “Lose Yourself” was the first rap song to ever win an Oscar for ‘Best Original Song.’ He didn’t attend the awards because he didn’t think he had a chance of winning

All best

Kyle

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