Good morning,

  

On the wires…
Hantavirus-hit cruise ship on way to Canary Islands after three evacuated. US, Iran weigh potential deal as Trump seeks way out of war. R13m cocaine seized at Durban harbour. Zille says Godongwana declared Joburg bankrupt over R21bn shortfall. Chiefs shake up PSL title race and hand Pirates a massive favour at Loftus. ROAD TO BUDAPEST: PSG knock out Bayern to set up final with Arsenal.
Quote of the day

 

“The most courageous act is still to think for yourself. Aloud.” – Coco Chanel

The indicators

Indicator  Price Change Ranges   Indicator Price  Change $ / R 16.31 -16 16.20 – 16.70 Gold $ 4 745 +78 € / R 19.18 -15 19.20 – 19.60 Brent $ 102 -10 £ / R 22.20 -20 22.10 – 22.50 DOW 49 910 +1.24% AUD/R 11.84 -10 11.80 – 12.10 JSE Top 40 111 221 +3.92% € / $ 1.1766 +0.0035   $ index* 97.79 -0.31 UST 10 Year 4.33% -0.05%     Bitcoin $ 81 687 -146 Source: Reuters/ Investing.com *The $ Dollar Index measures the value of the US Dollar against a basket of 6 foreign currencies including EUR, JPY, CAD, GBP, SEK and CHF.

Currency crackdown…

FXOne would like to thank Kyle Moulster for his contribution to the currency comment this morning.   The potential-peace seesaw continues, with not a lot else worth mentioning at the moment. Markets breathed a little easier as hopes of a US Iran peace agreement helped calm some of the recent geopolitical anxiety. Oil prices moved lower on the prospect of reduced disruption risk, which in turn eased inflation concerns and reduced demand for the “safe-haven” dollar. As a result, the dollar remained on the defensive, while Asian and emerging-market currencies found support from the improved risk mood.   For the rand, the backdrop was generally constructive. The weaker dollar helped us, with investors more willing to move into higher-yielding emerging-market currencies (Like ZAR). Lower oil prices eased the pressure on our trade balance, fuel prices and inflation expectations, all of which combined to improve sentiment toward the rand. As fickle as this may be at the moment. The commodity angle remains a big factor in the broader emerging-market story. While lower oil is supportive for South Africa’s import bill, firm precious-metal prices help on the export side. Gold and other metals remain important to South Africa’s external position, so the continued strength in those markets provide an additional layer of support for ZAR, especially when global investors are seemingly in a more risk-friendly mood.   The rand does remain incredibly elastic to any sudden change in sentiment. If the Middle East situation improves further and oil continues to ease, we should shoot down. With that said and as we have seen over the past two months, markets are likely to move straight back into the dollar for safety if tensions flare up again.    Overall, the currency market is continually being driven by three main forces: Middle East headlines, oil prices and the direction of the dollar. Those forces leaned slightly in favour of the rand yesterday – Albeit with an air of fragility. We continue to be headline-driven until there is more certainty around the conflict situation, and therefore a clearer outlook on global inflation.

On the radar…

USD – Initial Jobless Claims EUR – ECB Members Speak USD – FOMC Members Speak All – US – Iran War

Did you know?

In the ancient Persian Empire, men would debate ideas while sober and again while drunk. An idea had to sound good in both states to be considered acceptable.

 

Kind regards

 

Sibusiso Khalishwayo