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Daily Dose

22 May 2019

Good morning,


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On The Wires,

International:

  • US Congress asks Trump not to withdraw from Syria
  • Chang to be extradited to Mozambique by SA
  • Ethiopia start to ration electricity
  • Fuel in Zimbabwe over R20 a litre
  • Bookies say Crusaders cannot lose title

Local:

  • Calls for public protector’s head after Estina enquiry
  • Erik Venter bids Comair farewell
  • SA cavemen ate carbs
  • Labour court judge dies after Mamba bite in Zambia
  • Proteas say they are ready to face World Cup demons

Two Cents Worth

Nothing screws up your Friday more, than realising it’s Wednesday!

 

Currency Crackdown

The $ maintained its strength yesterday, although the US raised certain slight restrictions on Huawei. This was just another step in the ongoing trade spat between China and the US, which analysts believe will not be resolved too easily. As a result, risk off remains the main theme in the market and the rand took some intra-day strain yesterday, trading too a high of 14.49. Traders reported the pattern of local $ sellers, with offshore $ buyers. Just when everyone thought the rand was headed to higher levels, we saw a strong comeback and the rattler dipped below the 14.40 towards the close. This was mostly attributed to the withdrawal of Gigaba and Mbete from the MP list. Local politics having a say at last.

UK PM May suffered another blow yesterday as a potential second Brexit referendum proposal was voted against. The no vote was as a result of the proviso that this second referendum proposal would only take place in the event that Labour agreed to May’s initial Brexit proposals. It seems likely that May might be goner soon. GBP took another smack and dipped to the 1.27 level against the $. The impact can be seen against the rand, when looking at the performances of the other majors. Misery for GBP might not be over yet?

Other indicators: US Treasury prices are unchanged while the local R186 is nicely lower, on local political optimism. Brent is lower, and Gold is slightly off. US equity markets rebounded, as Huawei partners were granted limited relief, but Asia is lower as concerns emerge about the health of the global economy. The $ remains strong, at this point.

We have a couple of figures out today, including our local CPI (expected 4.7% year on year), which will be viewed with interest as the South African MPC begin their meeting. Tonight, we have the FOMC minutes which has the ability to move markets. The range seems range bound between the 14.20- 14.50 level for now.

What to look out for today?

  • SA-CPI
  • SA- MPC
  • SA- cabinet appointments
  • UK- CPI
  • UK- PPI
  • US- FOMC minutes

Did you know?

According to research by an international tanning company, women look oldest at 3.30 pm on Wednesdays. (?) Don’t shoot the messenger!

Have a good day,

Wayne

 

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