These are the mid Forex rates at 6:20 today:

USD = R18.27  AUD = R12.30
GBP = R23.04  DXY = 101.18
EUR = R20.18Brent Crude = $73.12 per barrel

The Rand had an up and down day yesterday, first weakening to R18.29 to the Dollar, then strengthening to R18.16 before suffering our biggest fall on the day to R18.34.  We open today at R18.30 and are in danger of giving up more ground should bank fears escalate. 

Yesterday’s main economic market event was the European Central Bank’s monetary policy announcement which came hot on the heels of Wednesday’s FED decision. The ECB has entered the final stage of its rate hike cycle. As expected, the central bank increased its main policy interest rates by 25bp, bringing the deposit rate to 3.25%. Since July last year, the ECB has hiked interest rates at every single policy meeting, by a total of 375bp. This is by far, the most aggressive monetary policy tightening cycle since the start of the monetary union. While today’s hike is the seventh increase in a row, it is the smallest in the current cycle, suggesting that the ECB has entered the final stage of this tightening cycle. 

The Federal Reserve’s weekly balance sheet. Total assets dropped by $59 billion in the week, and by $230 billion in the six weeks since peak bank bailout, to $8.50 trillion, as QT continued on track with a big Treasury securities roll-off, and as First Republic, the FDIC, and JP Morgan were splattered all over this balance sheet.

In the first quarter of 2023 US real GDP expanded at an annualised rate of 1.1%, according to the initial estimate from the Bureau of Economic Analysis—down significantly from 2.6% growth in the fourth quarter of 2022. However, the headline figure masks diverging trends; private consumption growth surged to 3.7% (annualised), up from just 1% in the final quarter of 2022, but this was largely offset by a steep decline in private inventory investment.

U.S. officials at the federal and state level are assessing the possibility of “market manipulation” behind big moves in banking share prices in recent days, a source familiar with the matter said on Thursday. Shares of regional banks resumed their slide this week after the collapse of First Republic Bank (OTC:FRCB), the third U.S. mid-sized lender to fail in two months. Short sellers raked in $378.9 million in paper profits on Thursday alone from betting against certain regional banks, according to analytics firm Ortex.

During his visit to the United Kingdom, Prime Minister Anthony Albanese announced 31 May as the date of entry into force of the Australia-United Kingdom Free Trade Agreement (A-UKFTA), following the expected completion of UK domestic processes. The gold-standard trade agreement will deliver unprecedented benefits to Australian businesses and create new well-paying jobs. With the entry into force of this comprehensive agreement, there will be no tariffs on over 99 per cent of Australian goods exports to the UK, opening up new export opportunities, including for the agriculture sector. 

China’s service sector continued to expand sharply in April, according to PMI data, with firms attributing the latest rise in output to improved market conditions and greater customer numbers. However, rates of growth in both output and new orders softened from March. The rate of job creation also moderated, slipping to a three-month low, contributing to a further increase in backlogs of work. April data also pointed to a quicker rise in operating expenses, with cost inflation hitting a 12-month high. Despite this, output charges rose only slightly as firms sought to boost competitiveness and attract sales. 

Lionel Messi May Get Paid $400 Million to Play in Saudi Arabia Next Season. Though Lionel Messi has held the edge in on-field accomplishments in his career-long battle with Cristiano Ronaldo, the latter has squeaked past the former when it comes to earnings. However, there may be a mega-deal in the works to shake up the ranks of the world’s highest-paid athletes. A new report claims that Lionel Messi may be offered “the most lucrative salary deal in the history of football.” The Saudi Arabian government wants to bring Messi to its Saudi Pro League this summer, according to the Telegraph. Discussions are underway to determine if the player will leave Paris Saint-Germain