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Daily Dose

Daily Dose

Good Morning,

On the wires…

  • Crossbow-carrying intruder charged after ‘attempt to assassinate’ the queen
  • 3 states in the US have declared states of emergency over monkeypox outbreaks to expand resources
  • Russian energy giant Gazprom saw its natural-gas July production slump to lowest level since 2008
  • MEC to visit Tembisa after residents leave trail of destruction over ‘skyrocketing’ cost of services
  • Post Office worker in court over theft of R200 000 unclaimed Sassa money
  • Van Niekerk inspired by Schoenmaker, left speechless after Commonwealth gold

Quote of the day…

“If you never taste a bad apple, you will never appreciate a good apple.”  – Turkish saying

The indicators…

Currency crackdown…

The currency market was largely uneventful throughout yesterday’s local trading session, with the rand mostly stuck around the mid-16.50s against the dollar. Traders seemed to be taking a wait-and-see approach after the Fed repositioned its stance on rates hikes from aggressive to one dependant on future economic releases following last week’s hike. However, the market turned sharply weaker after our close, with the rand spiking to a day’s high 16.88/$ after US House of Representatives Speaker Nancy Pelosi arrived in Taiwan despite earlier warnings from China. This led to a lower close in US equities, which also spilt into the Asian session while the dollar recorded its biggest surge in recent weeks on safe-haven demand.

Pelosi became the highest ranking US official to set foot in Taiwan in over 25-years, with her presence expected to further escalate tensions between China and the US. The Chinese military responded by mobilising its fighter jets and war ships to buzz around the Taiwan strait in protest, with further acts of aggression expected when Pelosi meets Taiwan’s President Tsai Ing-wen.

The dollar also received a boost, with Treasury yields spiking following surprising hawkish comments from the usually very dovish Fed member pair of Daly and Evans. They announced that they, along with their colleagues “remain resolute and completed united” about getting rates up to a level that will more significantly curb economic activity. The message came despite data released earlier in the day signalled that the labour market was easing amid lower demand, which could lead to easing wage inflation.

Sentiment is a little better this morning, with the euro, pound and yen all managing to chip away some lost gains from the dollar. The rand has also managed to claw back about 20c from last night’s highs to trade at 16.68/$ this morning. Gold is trading lower – weighed down the firmer dollar, while oil prices are largely unchanged.

On the radar…

  • EU – Composite & Service PMIs
  • UK – Composite & Service PMIs
  • EU – PPI
  • EU – Retail Sales
  • US – OPEC Meeting
  • US – Composite & Service PMIs
  • US – Factory Orders
  • US – ISM Non-Manufacturing PMI

Did you know?

Apple juice was one of the earliest prescribed antidepressants.

Have a great day,

Nyiko

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