On the wires…

·     Ceasefire talks between Ukraine and Russia moving at a snail’s pace as US mediation stalls.

·     Irish visa crisis hits thousands of South Africans.

·     Two violent fights breakout at the V&A Waterfront.

·     Mbalula dares DA to ‘pack its bags’ as Ramaphosa stands firm on Whitfield’s.

·     Ex-Transnet bosses Molefe, Gama and Singh granted R50k bail over fraud, corruption charges.

·     Emma Raducanu’s stalker blocked by Wimbledon after name found in ballot.

·     Al Hilal dump Manchester City out of the CWC.

Quote of the day

“Do the best you can until you know better. Then when you know better, do better.” – Maya Angelou

The indicators…

Currency crackdown…

The rand took a long weekend, moving very little and opening almost exactly where we did yesterday, this morning. Both local and foreign economic data has been light, with geo-political news also relatively subdued. The bond market took a holiday as well, with SAGB’s barely traded throughout the day. There is some lightweight local news due a bit later on, but the more important data will come out of the Eurozone (In the form of CPI), and the US (Employment data). Neither are expected to throw any curveballs and so shouldn’t instigate too much movement either – although you never know. The rand has support at current levels, with the SARB reporting that South Africa’s money supply growing by 6.86% and private sector credit by 4.98%, indicating robust consumer demand.

USD has continued its downward trajectory, reaching its lowest level against the euro since September 2021. This decline is still a reflection on President Donald Trump’s proposed $3.3 trillion tax-cut and spending bill, which will likely significantly increase US national debt. This particular bubble has never burst before, but the worry is that there is a first time for everything. Moreover, Trump’s persistent and public pressure on the Fed to cut interest rates has also raised concerns around the Fed’s independence. This has resulted in heavy flows to the euro, which has picked up almost 14% (!) this half. Asian currencies have also picked up gains on the back of dollar weakness, with the only real draw to USD being safe-haven demand in the event of a full-scale war in the Middle East.

Gold climbed for a second day on optimism that the Fed will resume rate cuts this half, while investors will continue to monitor US trade talks before the 9 July tariff deadline. Oil declined for a second day, touching its lowest level since early June, with the focus turning to how much the OPEC+ will increase output quotas this weekend. Bitcoin, a good reflection of risk appetite, remains well above the $100,000 mark – indicating that there are some stubborn risk lovers remaining in the market.

On the radar…

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