Daily Dose

21 September 2017

Good morning,     

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On the Wires

Trump Urges Strong And Swift UN Action To  End Rohingya Crisis … Death Toll In Mexico City Rises To 224 … At Least 10 Dead, 92 Missing In Eastern Congo Floods … Police Arrest Three In Wales Over London Train Bomb Attack … Hurricane Maria Threatens To Flatten Puerto Rico After Slamming Dominica … KPMG International Chair Apologises ‘For What Went Wrong In KPMG South Africa’ … A 13-Year-Old Boy Dies After Being Attacked By Other Pupils At An East Rand School … Axe Murder-Accused Henri Van Breda Back In Court … Primary School Pupils On Arvs After Classmate Pricks Them With Syringes …President Zuma Signs UN Treaty Banning Nuclear Weapons … South Africa To Play Four Day Test Against Zimbabwe … Chiefs Emerge Victorious Against Maritzburg … Nkosi, Schreuder And Louw Called Up To Springbok Squad … Baxter Names Squad For Burkina Faso Visit … Froome Happy To End 'Unforgettable' Year…

Throwback Thursday

Today marks the 80th anniversary of the publication of JRR Tolkien’s classic fantasy novel The Hobbit, which told the story of Bilbo Baggins and his great adventure through Middle-earth with a wizard and a company of 13 Dwarves. What started off as a bedtime story for his children became an enduring tale that would eventually be translated into over 50 languages.

Thanks to The Hobbit and The Lord of the Rings some years later, Tolkien’s world of Middle-earth quickly grew in popularity, and set the tone for a new genre of fantasy fiction. The novels were eventually made into movies that have become major box office hits, generating almost $6 billion.


Currency Crackdown

The rand recovered to close stronger yesterday after better than expected inflation figures suggested a further interest rate cut to spur economic growth. Since then the rand has been trading about 10c higher after the dollar rallied following the Fed’s policy meeting last night.

The Fed kept interest rates unchanged but announced that it would begin reducing its $4.5 trillion balance sheet by $10 billion every month starting in October. In addition, it suggested that there could be one more interest rate hike this year, followed by three more in 2018. The probability of an interest rate hike has now risen to 64% this year compare with 47% this time last week.

Following two weeks of disappointing economic data and numerous political scandals and revelations handicapping the rand, we saw some positivity as CPI data remained comfortably with the SARB’s targeted inflation band yesterday – rising slightly to 4.8% in August vs 4.6% but still lower than expectations of 4.9%. This has heightened expectations that the SARB could cuts rates by 25bps to 6.50% at its meeting today (15:30), in a move that is expected to spur local economic growth. However, if the Fed does end up hiking rates by the end of the year we’re likely to see further weakness in the rand as the interest rate differential between our currency and the dollar narrows. Added to increasing political turmoil leading into the ANC December conference, the rand might be in for a bumpy ride.

Economic releases

US: Initial Jobless Claims & Philadelphia Fed Business Outlook (14:30); Leading Index (16:00)

SA: SARB Interest Rate Announcement (15:30)

EU: Consumer Confidence (16:00)

Did you know?

JRR Tolkien was born in Bloemfontein, Free State in 1892


Have a great day,




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