Good morning, | |||||||||||||||||||||||||||||||||||||||||||||||||||||
On the wires… | |||||||||||||||||||||||||||||||||||||||||||||||||||||
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Quote of the day | |||||||||||||||||||||||||||||||||||||||||||||||||||||
“We stretch time when we suffer, we compress time when we’re joyful, we expand space in empathy, we collapse distance in memory.” — Abhijit Naskar | |||||||||||||||||||||||||||||||||||||||||||||||||||||
The indicators | |||||||||||||||||||||||||||||||||||||||||||||||||||||
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Currency crackdown… | |||||||||||||||||||||||||||||||||||||||||||||||||||||
The rand put in a solid performance in yesterday’s session, trading in a tight range between R16.22-25/$, but has slipped overnight. It is edging closer to the R16.36/$ high we saw on Monday afternoon after the new set of overnight strikes between the US and Iran saw the local session open at R16.30/$.
The overnight strikes have seen the oil price climb slightly, touching the $100/barrel level again. As we’ve seen since the war began, this is bad news for the rand. The market sentiment has shifted slightly away from the more risk-on we saw yesterday. However, markets aren’t convinced that these new strikes mean there is no peace deal in sight. Trump has assured markets that both sides are still working toward an agreement. This is reflected in US equity markets, with the S&P reaching another all-time high. Whilst equity markets are flying, Bitcoin has dipped below the $70,000 level and continues to take a pounding. The US dollar was further supported by strong JOLTS reports for April, which were at the highest level in almost two years! Layoff figures also dropped, which showed signs of resilience in the US labour market – the war machine performing its function correctly?
Locally, vehicle sales climbed by 2.1% MoM and local manufacturing and GDP data is being released later in the day. The economy is trying its best, but commodity prices and risk sentiment continue to bully us. Gold price fell and oil increased, which is the exact combination the rand does not want to see. US inflation and nonfarm employment change figures being released later will provide further context to the resilience of the US economy and labour market, which will guide the rand’s direction for the latter part of the local session. Keep an eye on these key releases and headlines regarding the US-Iran war. Good luck. | |||||||||||||||||||||||||||||||||||||||||||||||||||||
On the radar… | |||||||||||||||||||||||||||||||||||||||||||||||||||||
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Did you know? | |||||||||||||||||||||||||||||||||||||||||||||||||||||
I Simangaliso Wetland Park was declared as South Africa’s first World Heritage Site in December 1999. | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Kind regards Luke Rosenberg |
