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Daily Dose

14 August 2018

Happy Friday, 

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US reaps more than $1.4 billion from steel and aluminium tariffs…Hong Kong's economic prospects darken on rising rates, US-China trade worries…Australian archbishop begins home detention over sex abuse cover-up…Trump signs defence bill with diluted China controls…Fire hits Myanmar hospital, patients evacuated on stretchers…Bill to sell booze at Western Cape schools slammed…Court to hear convicted murderer Henri Van Breda's appeal bid…Land grab bid by bogus City of Tshwane officials foiled…Zille slammed over latest Twitter storm…East London residents demand that electricity connections be restored…Itumeleng Khune back in Kaizer Chiefs camp after Sbahle Mpisane accident…Liverpool report Salah to police after video shows him on phone while driving…Chiliboy Ralepelle to captain the Sharks in the Currie Cup…Rabada crowned world's best youngster by Wisden…Serena breezes past Gavrilova…

Two Cents Worth

“There is one consolation in being sick; and that is the possibility that you may recover to a better state than you were ever in before”

Henry David Thoreau

Currency Crackdown

I guess it’s not all doom and gloom after all! Emerging markets have just about reversed yesterday selloff after Turkey’s meltdown rippled across the globe, sending stocks and currencies to their weakest levels in a year. We’re seeing the rand trading not far off from Friday’s close.

Efforts announced by the Turkish central bank to stabilize the Turkish lira appear to have assisted the recovery, but it looks like there’s been a growing consensus that contagion risk from Turkey's economic problems was unlikely to be significant for other markets elsewhere, including those in the emerging space. It appears like the risk of emerging market (EM) contagion is only sentiment driven and not fundamental as Turkey has limited trade and economic ties to other EMs. The SARB even went as far declaring that it was nowhere near intervening to try and prop up the rand, saying that it would only do so if the orderly functioning of markets is threatened.

A firmer euro against the dollar this morning also provided some support to EMs after quarterly German GDP figures came out better than expected ahead of the EU’s release later this morning (11:00). Meanwhile, German and French CPI data came out in line with expectations. Other economic releases to look out for today include UK employment figures (10:30), German ZEW Survey Expectations (11:00) and local Mining Production (11:30).

Finally, in other markets the JSE closed higher on the back of the weaker rand, while global equities (excl. Japan) were all lower. Oil prices are largely unchanged this morning, while gold prices have continued their slide.

Did you know?

August has the highest percentage of births

 

Have an awesome day

Nyiko

 

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