FXOne would like to thank Wayne Rosenberg for his contribution to the crackdown this morning.

The rand had a relatively strong trading session yesterday, strengthening against all three majors. Overnight the rand was able to show some more strength, however, risk off has moved it off its overnight lows. US equity markets got crunched and Asia has fallen again this morning. Commodity prices continue to soar, and it is with this support, that the rand has managed to hold onto present levels. Inflation, growth, and the impact that the Ukraine Russian conflict has on both, are the immediate market concerns, along with the explosion in commodity prices globally. Locally, we have seen an increased expectation of a larger interest rate increase than anticipated. Consensus seems to be moving to a 50-basis point hike at the next meeting. At the same time, and not necessarily directly related, SA bonds have been dumped. Yields on the SA bonds continue to rise, as JSE figures show that foreigners alone have sold a massive R36 billion in the last week alone. Amazing that the rand has held its levels even with bond activity.

Global equity markets are in disarray and the futures are showing more expected losses later. Brent continues to trade at elevated levels (highest since 2008), while all commodities are trading higher. Inflation impacts, right now, are out of control- stagflation on the way! The US 10-year yield remains below the 1.80% level, which bodes well for US interest rate expectations. Gold is trading at an impressive recent high of above $2020, while the $ continues to wreak havoc. It is not often we see all markets trading with the same volatility as Bitcoin. Bitcoin also showing depressed demand below the $40 000 level.

We have SA GDP releases today, with Eskom also limping. Might be interesting but will have a limited impact (unless Eskom pulls a hamstring). Keep an eye on oil prices and commodities for a clue. If they come off their highs, the rand might release a bit