FXOne would like to thank Warrick Butler from Standard Bank for his valued contribution to the dose. Good morning “ Give a man a fish, and he will eat for a day. Teach a man to fish, and he will sit in a boat and drink beer all day” Current USDZAR level: 16.6800/16.6900 Rand range last week: 16.3500-16.9800 and NY Friday close: 16.8400 In life there are two steadfast rules that stand out amongst many. They are: Don’t lie to the taxman and don’t lie to your wife. In both cases these rules are meant to protect against the loss of trust by the people who can make your life an absolute misery. In any relationship it takes a long time to build a strong level of trust and all it takes is one misstep for it all to come crumbling down. Last Thursday I believed the SARB came as close to dammit to allowing their well-built house of cards to collapse. The market had fully priced in a hike and the 85% analyst prediction for a 25bps hike followed suit. A CPI print on 5.0%, well above the level they used to hike at their last meeting suggested it was a done deal, and yet they chose not to pull the trigger, using domestic growth as the caveat. The reaction was immediate with the market showing their displeasure at the shock and subsequent loss of credibility. When you mandate is 3% inflation and inflation is printing higher than when you last hiked, it’s a tall order to expect investors to swallow the excuses. This is of course my opinion, and you will get quite the opposite from a number of traders in the market. This morning we have walked into a market alive with risk appetite after a weekend where hostilities between Iran and the US have temporarily ceased. We have seen this show before, a number of times in fact, but given how low cross-asset volatility is, in an environment where there are warning signs flashing everywhere (private credit and inflation) it amazes me how quickly people are determined to flood their cash into risky assets at the first sign of happiness. This is the story this morning with oil a solid 6% stronger and the Rand 1% better off on the day. The memory lost from last week’s mayhem. I find it incredible that investors/traders are so quick to believe that there is a such a material change over a weekend when we know full well that the self-appointed leader of the free world is as fickle as the wind. If you are like me and not inclined to trust the nature of the man, or the willingness of Iran to lie down and accept their fate, then this morning levels are a great opportunity to buy the dips in FX and oil. Gold below $4,150-$4,200 still has the potential to push back to $3,570-$3,700. Domestic equities remain under pressure. Last week we had UST’s push above and hold the 4.25% resistance level and I would look to pay rates again on any dip to this level, especially with the Fed looming this week. Rand support at 16.50/55 should hold given its bearish close last week and there is a very good chance of further weakness to at least 17.50, so I will be looking to buy dips for now. Good luck and have a great day ahead Support levels – 16.6500, 16.4200, 16.3500, 16.25/23, 16.18/15, 16.00/15.95 Resistance levels – 16.95/17.00, 17.2500, 17.3500, 17.5000, 17.80/85 | 
