On the wires…

• 800 troops headed for Cape Flats as it bears brunt of 83 Western Cape killings in past 11 days.
• Iran says ‘non-hostile vessels’ may pass through Strait of Hormuz as oil price falls.
• WC has 6 months’ worth of dam water before depletion.
• Russia launches 948 drones at Ukraine in largest attack over 24-hour period.
• New Zealand thump Proteas Women to win T20 series 4-1.
• Mo Salah to leave Liverpool at the end of the season: “Second to none”.

Quote of the day

“Everything can be taken from a man, but the last of human freedoms: to choose one’s attitudes in any given set of circumstances.” — Viktor Frankl

 The indicators

Currency crackdown…

FXOne would like to thank Wayne Rosenberg for his valued contribution to the currency comment this morning.

All markets are all over the place. This morning sees Asian equity markets and US equity futures in the green on the back on the US’s 15-point plan to end the Iranian conflict. Broad speculation is that this is an attempt to delay and allow US ground troops to get to the region. Insider trading allegations are also aligned to the timing of certain of the conflict announcements, with the Trump US approval rating hitting an all-time low of 36%. With oil lower, Gold higher and a slightly weaker $, it seems as if the rand and riskier assets might be in for a recovery day. The initial outcome of the US plan allegedly would involve a 30-day ceasefire, which if true, would allow the riskier assets to have a generous recoil. Reports of a potential European fuel squeeze might just upset the recovery, based on a demand driven oil price increase. Brent is has fallen below the $100 level this morning, so opportunism should dictate markets.

Other indicators show the following: as mentioned Gold higher (ZAR positive), US 10-year bond yields are slightly lower reflecting inflation relief with a lower oil price. Bitcoin is higher (risk on) with US equity markets slightly lower (timing issue). This morning we see Asian equity markets higher (risk on) and the US equity futures all in the green (risk on). The $ is slightly weaker this morning which should also give the rand a small roll. Economic releases have taken a back seat, but CPI expectation out of Eurozone should make interesting reading.

Volatility remains high, with the rand able to stretch in a 40c range against the majors. 16.80 to 17.20 is easily possible against the $, through any trading day. In times of uncertainty, apply your risk management principles and make call levels prior to becoming emotionally involved. Decisions with money when you are emotional are never great, so plan and apply.

On the radar…

Did you know?

Kind regards

Luke Rosenberg