On the wires…

• Three cruise ship passengers die in suspected hantavirus outbreak
• Australia begins hearings into Bondi Beach attack and antisemitism
• Trump says US will help free ships stranded in Strait of Hormuz
• Human remains found in 500kg crocodile during search for missing businessman
• Durban City win the Nedbank Cup
• SA relay teams win two silvers medals at World Athletic Relays in Gaborone

Quote of the day

“Two things are infinite: the universe and human stupidity; and I’m not sure about the universe.” — Albert Einstein

 The indicators

Currency crackdown…

Already the 4^th of May and we see no progress in the Middle East crisis. Increasing warnings about upcoming shortages in the oil market, even from the big US oil companies, who believe that reserves are being depleted and that the market has not seen the full impact of the closure of the Strait of Hormuz. Current deliveries are from ships that have now reached their destinations. Reserves and stockpiles are being depleted, and the market is considered to have been in a pricing “grace period”. Additional or new supply will need to come at current prices which will impact dramatically on inflation and supply chains globally. Linked to these views and opinions, is a warning that emerging markets seemed to have dodged a bullet, on the potential impact to the previously mentioned shortages and pricing. Observers have noted that emerging market hedges are becoming apparent. This will also have an impact on the rand. The US has responded to a 14-point Iranian proposal, via Pakistan, but Trump has already mentioned that it is unlikely that Iran would find the response acceptable.

On Thursday night we had the US Fed interest rate announcement. As expected, rates were left unchanged, but Powell did mention the inflation outlook has potentially eliminated any possibility of a rate cut in 2026.

Indicators: The price of oil remains an issue, although it has softened slightly and remains below the $120 mark. For anyone to be comfortable, we need the price to remove below $100 level, and this seems a million miles away. Gold has been stuck on the mud, even though the $ has been pummelled again. US equity markets were mixed, although earnings from some of the “big Boys” were well better than expected. These performances did attract buying into the tech markets and we have seen some follow through in Asia this morning. US equity futures are mixed. Bitcoin had a great move higher, and this is due to an influx of exchange traded fund investments.

We have holidays in China, Japan and the UK today, so liquidity will be impacted this morning. The market has still been led by geopolitical headlines, and we desperately need a resolution to the current impasse. For every day that this issue continues, it will impact more and every single one of us, as well as investments and the currency.

On the radar…

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