On the wires…

• South Korea investigators seek to extend Yoon’s arrest warrant
• “The Brutalist” triumphs at the Golden Globes
• Lost boy survives five days in Zimbabwe park teeming with Lions
• Ramaphosa signs law to enforce 15% global minimum corporate tax rate for multinationals
• Level 8 weather warning for KZN, resident brace for severe rainfall
• Man U slow Liverpool’s title chase
• Proteas to play Aussie in crickets Test Champs final at Lords

Quote of the day

“The new year stands before us, like a chapter in a book, waiting to be written.”– Melody Beattie

The indicators…

Currency crackdown…

A tough holiday period for the rand! As soon as the dose took a break (December 20^th), the rand went into a slide that was difficult to explain. Illiquid markets at that trading time must be a part of it, but it seemed as if the continued strengthening of the $ was mostly to blame. I did see reports that the US was starting to review AGOA again, but those were not widely reported and seemed rather an excuse for the poor and unexplained continued weakness of the rattler. Risk off markets were also in play and so the rand took a hiding and had very little defence. The current price has to be the true reflection of its value, otherwise it would not be here. If you look at the moves of the key indicators since December 20, there is not an obvious reason that jumps out. The rand finished the year down against the $ (-3.12%) and £ (-1.22%), but with an approximate +3% gain against the Euro.

This morning the $ continues to hover near a 2 year high, so no respite for the rand just yet, despite its oversold technical signal. The Fed also commented on US inflation over the weekend, indicating that there fight against inflation was not complete. This translates to higher rates for longer and a continuation of a stronger $. The policies of the incoming US President and potential Chinese market stimulus are immediate key areas to watch going forward. The fresh higher oil price cannot be ignored when mentioning inflation nervousness.

We have a mountain of data releases this week, with inflation back in the headlights. US economic potential will be measured with each release to determine whether there might be a pull effect against the current “higher rates for longer” rhetoric. The FOMC minutes release later in the week might prove disruptive. Looking towards the end of the month, we have central bank meetings including the following: Japan (24 Jan), US (29 Jan), SA and ECB (30 Jan) and then the BoE (6 Feb).

All the best for 2025 trading year!

 On the radar…

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