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Daily Dose

24 May 2018

Good Morning, 

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On the Wires

Uber posts big sales jump in first quarter and boosts valuation to $62 billion…Trump's demand that China cut its US trade deficit by $200 billion defies the laws of economics…US launches investigation into auto imports on a 'national security' basis…Russia's central bank governor touts Moscow alternative to SWIFT transfer system…Protests play havoc on Cape Town roads, causing major traffic headaches…Chaos as Uber, metered taxis clash at Cape Town airport…SARS to re-establish teams to probe illicit tobacco trade…SA in bottom ten for global competitiveness…Pravin Gordhan to announce board changes to SOEs…Neymar's return 'better than expected'…Iniesta says going to 'new home' Japan…Depressed Wallaby Slipper banned for cocaine use…Victor Gomes nominated for PSL Referee of the Season…Du Preez confirms that Chiliboy will be in Bok squad.

Two Cents Worth

“Our greatest glory is not in never falling, but in rising every time we fall.”

-Confucius

Currency Crackdown

The Rand had a volatile session yesterday, trading between a high of 12.68 and a low of 12.40 against the dollar. The dollar initially recovered some lost gains from the previous before better than expected local CPI figures lifted the rand across the board. The rand extended its gains overnight after the dollar weakened on the back of dovish comments from the Fed following the release of the minutes from their last meeting.

While most Fed policymakers believe that another interest rate hike would be reasonable (as expected), the minutes showed that Fed would tolerate inflation rising above its goal for a time. The minutes also showed that board members generally agreed to make a small adjustment in its policy implementation by raising the interest rates on its excess reserves by 20 basis points, rather than by a widely anticipated 25 basis points. Also weighing on the dollar were reports that Trump would impose new tariffs on imported cars.

Meanwhile, the rand found additional support as pressure eased on emerging markets after Turkey’s central bank hiked interest rates by 300 basis points in a bid to save its collapsing currency. This

Elsewhere, the euro was hindered by concerns over economic slowdown in the currency bloc and political risks in Italy but fortunately bounced back to 1.1708 after hitting a six-month Low against the dollar of 1.1676.

The pound saw new lows yesterday after inflation data showed an unexpected dip. The inflation came out at 2.4% below an expected 2.5%. While monthly CPI data (0.4%) also came out lower than the forecasted 0.5%

In other markets;

Asian markets weakened after comments after Trumps tariff threats, with Japanese markets taking the biggest hit. Gold prices are firmer, while oil prices are still flat

 

Economic Data Out Today

GB: Retail Sales ex Fuel MoM – 10:30AM

GB: Retail Sales ex Fuel YoY  – 10:30AM

GB: Retail Sales MoM – 10:30AM

GB: Retail Sales YoY – 10:30AM

EU: Monetary Policy Meeting Accounts – 01:30PM

ZA: Interest rate Decision – 03:00 PM

US: Existing Home sales & MOM – 04:00 PM

 

Did you know?

August has the highest percentage of births.

 

Have a great day

Bongani

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