The weatherman says today is going to be a scorcher, luckily for the Rand there is a US Bank holiday and there will hopefully be some respite. Not withstanding this, the rand will be under immense pressure this week.
On our Northern border [Mozambique] cyclone Freddy takes aim at Beira and the interior. We wish everyone prepares well and is safe.
Locally the focus moves to Wednesday and the Budget Speech, but geopolitical tensions on the Korean peninsula have escalated as N. Korea fired more missiles over the weekend and Russia upped the ante in Ukraine as the 1-year anniversary of the war there draws near.
These are the mid rates at 7:10 today:
| USD = R18.05 | AUD = R12.44 |
| GBP = R21.73 | DXY = 103.95 |
| EUR = R19.30 | Brent Crude = $83.34 per barrel |
President Joe Biden’s administration is planning to impose new export controls and a fresh round of sanctions on Russia, targeting key industries a year after Vladimir Putin started his invasion of Ukraine. The measures will target Russia’s defense and energy sectors, financial institutions and several individuals, according to people familiar with the matter who spoke on condition of anonymity. The US and allies are also expected to turn their focus to preventing the evasion and circumvention of sanctions and disrupt support Russia receives from third tier countries.
It was mostly quiet on Friday and on the weekend, with an initial push higher in yields and sell-off in equities largely reversing later in the session. Squaring and covering shorts ahead of today’s US President’s Day Holiday was cited for the reversal, as was some less hawkish messaging from the Fed’s Barkin, which talked up the merits of moving by 25bp increments, running counter to Mester and Bullard’s discussion of wanting a 50bp hike in February. The US 10yr yield at one point hit 3.93%, before more than retracing to close at 3.81%. Over the week though the 10yr yield is up 8bps.
Meta is rolling a new paid verification subscription service called Meta Verified, CEO Mark Zuckerberg announced on Sunday. Coming soon, for $11.99/month on web and $14.99/month on iOs, users on Instagram and Facebook will be able to pay to become verified users, which will entail, among other things, a blue verification badge. The service will first be introduced in New Zealand and Australia this year, and will be available in other nations ‘soon,’ according to Zuckerberg.
Prime Minister Chris Hipkins and Finance Minister Grant Robertson are speaking after this week’s Cabinet meeting in the wake of Cyclone Gabrielle. The full extent of the cyclone damage is becoming clearer as transport, power and telecommunications connections are re-established. The government has announced a $50 million support package to provide immediate relief for businesses hit by Cyclone Gabrielle. An additional $250 million has been ring-fenced to top up the National Land Transport Fund’s emergency budget to repair crucial road networks. Ministers also agreed to extend the national state of emergency.
U.S. and European multinational firms are getting more cautious about their capital investments in China due to geopolitical concerns, according to a risk consultancy. Richard Martin, managing director of IMA Asia, said the ongoing U.S. trade tensions with China is the main reason for the investment caution shown by American companies. “Without a doubt, it is geopolitical risk because U.S. firms were becoming more cautious from the Trump administration on with the trade war,”