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Daily Dose

Daily Dose

Good Morning,

On the wires…

  • End ‘double standards’ on refugees, UN expert urges Poland
  • In phone talks, Xi warns Biden not to ‘play with fire’ on Taiwan
  • At least 42 dead in India after drinking toxic alcohol
  • Suspected KZN hitman apprehended while travelling on bus to Western Cape
  • Pretoria hospital bags award for reducing stroke patient treatment time to 15 minutes
  • Rilee rampant as Proteas right all the wrongs to emphatically square T20 series

Meme of the day…

The indicators…

Currency crackdown

A surprisingly weak GDP reading out the US has seen the rand gain nearly 30c on the dollar from its open yesterday to trade around the 16.44 level this morning. The data showed that GDP unexpectedly contracted 0.9% (0.5% increase expected) in the 2nd quarter, its second consecutive quarter of declines, and came just a day after the Fed signalled that a slowing economy could slow the pace of interest rate hikes. US bond yields responded by diving sharply lower as some emerging markets found support – the rand being a major beneficiary – with investors convinced that magnitude of rate hikes we saw from the Fed in last few meetings can’t be repeated with the US on the brink of a recession.

Global growth fears will remain in focus today ahead of the EU’s 2nd quarter GDP release later this morning. Analysts are calling for a 0.2% rise – down from 0.6% from the previous quarter, with ECB Governing Council member Ignazio Visco warning that there was the risk of a recession for the region. Also noteworthy was China’s decision not to mention its full-year GDP growth target after a high-level Communist Party meeting, suggesting that the target may be difficult to achieve as it continues to struggle with COVID-19 outbreaks. In the UK, the pound is sitting near a one-month high ahead of the Bank of England’s meeting next week where a 50 basis-point hike is expected.

In other markets, oil prices edged higher ahead of next week’s OPEC+ meeting to discuss future production levels. The OPEC members have now unwound the record 9.7 million barrels per day supply cut they agreed on in April 2020, when the COVID-19 pandemic slammed demand. It could be difficult for the group to boost supply significantly given that many members are struggling to meet their current production quotas due to a lack of investment.

On the radar…

  • SA – Trade Balance
  • SA – South Africa Budget
  • US – Core PCE Price Index
  • UK – Net Consumer Credit
  • EU – GDP
  • EU – CPI

Did you know?

Blockbuster had the chance to buy Netflix for $50 million in 2000 Today, Netflix’s market cap is more than $95 billion

Have a great day

Nyiko

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