Good morning,

• ‘We fear for our lives’ – deadline for migrants to leave South Africa looms.
• Iran scores $300 billion investment fund as incentive to end war with US, Israel.
• Case against ‘Cat’ Matlala return to court.
• SARB launches new R2 coin marking 50^th anniversary of 1976 youth uprising.
• Serena Williams to play doubles with sister Venus at Wimbledon.
• Messi hat-trick equals scoring record as Argentina dazzle against Algeria.

“Prejudice wears a variety of hats, none of them becoming.” – Kevin Ansbro

Monday was a good day for the rand. The local unit opened at R16.27/$ , reached a low of R16.12/$ and closed at R16.19/$. Improved risk sentiment from the advancement in reaching a peace deal in the war in the ME saw increased flows into higher yielding emerging market currencies like South Africa’s. Wayne summed it up appropriately on Monday, we are riding the tailwinds of a perfect storm. It will be concerning if we do not reach the R16.10/$ level, especially with the peace negotiations in the ME not being 100% signed or sealed. Any blip in the negotiations and movement of oil could see us return to higher levels.

Local and Eurozone CPI figures are released today. It will be interesting to see the local inflation figures, especially since the SARB increased interest rates and the price of oil (main inflation driver) is now back to below $80 per barrel. We all know that inflation rarely comes in one wave and that there will be secondary lag effects, but have the SARB positioned the currency to reap further rewards whilst risk-on sentiment is higher? Will our higher rates make SA a particularly attractive option to overseas investors and see the rand benefit more than our emerging market peers?

On a related note, the Fed will announce their interest rate decision this evening. The US economy has shown resilience throughout the elevated prices of oil. The drop of the oil price has markets predicting that the Fed will not increase rates as previously thought, but rather that they will keep rates unchanged. This is a big shift from predictions from a month ago. Strong labour market figures and controlled levels of inflation have kept the US going and have now put them in a position to hold and monitor the effects in the months going forward.

• ZAR – CPI
• ZAR – Retail sales
• USD – Crude oil inventories
• USD – FED interest rate decision

• EUR – CPI
• USD – Retail sales
• USD – President Trump speaks

Ancient Egyptians believed it was good luck to enter a house left foot first.