On the wires…

• Concern as SA jet fuel prices surge from R8.50/litre to R30
• Accused media gala shooter charged with attempted Trump assassination
• Ramaphosa condemns xenophobia on eve of anti-immigrant march to Union Buildings
• Elon Musk’s trial against Sam Altman to reveal the ongoing power struggle for OpenAI
• Proteas seal T20 series with fourth win over India as Wolvaardt magic strikes again
• Property sector roars back as Spear and Fairvest raise R2bn in bookbuilds

Quote of the day

“If you can’t be kind, at least be vague.” — Judith Martin

 The indicators

Currency crackdown…

The dollar weakened slightly over the long weekend, as investors remained largely on the sidelines ahead of a raft of central bank decisions this week and after a diplomatic setback between Washington and Tehran. Euro and Sterling have barely budged, with the market seemingly holding its’ breath. It is a big week for all foreign currency market participants, as major central banks across the globe gear up for their respective interest rate decisions. Policymakers have had a chance to see what kind of impact surging oil prices have had so far, and any commentary around the inflationary shock will be keenly watched. This is ideally going to be a short-term shock, rather than one that increases the base level of prices over the long term.

The Fed is widely expected to leave rates unchanged, amid increasing economic uncertainty from the Iran war. The meeting could also be the last for Chair Jerome Powell. Media reports are suggesting that US lawmakers may allow the Senate confirmation of Fed Chair nominee Kevin Warsh to proceed, after the Department of Justice dropped an investigation into Powell last week. The expectation seems to be that interest rates will be left alone by most of most of the world, for now. With that being said, I would not be the least bit surprised if South Africa chooses to increase by 25bps regardless – this would be rand-supportive but obviously isn’t great from the consumer perspective.

This short week is likely to continue to be dictated by war-related news, and any potnetially unexpected interest rate amendments. Near term, the rand should remain range-bound if global risk appetite holds, but any renewed dollar strength or negative local headlines could quickly push us back toward the upper end of the recent range. Not much else to report as it stands!

On the radar…

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