These are the mid rates at 6:20 today:

USD = R18.10  AUD = R12.12
GBP = R22.53  DXY = 102.00
EUR = R19.72Brent Crude = $84.10 per barrel

Sometimes you can only shake your head and wonder if government actually has a plan to deal with load shedding.  The national state of disaster for our electricity crisis was ended with immediate effect yesterday, just two months after being announced. This while we were at Stage 4 load shedding and after Eskom announced that they will have at least a 2000mwh shortfall for the next 52 weeks. Exactly what the state of disaster achieved is up for debate along with the newly appointed Minister of Electricity.

The Rand’s week old rally also ran out of steam yesterday as we slipped back above R18.00 to the Dollar.  Things were already looking precarious as we fell from R17.75 to R17.92 on Tuesday, and then yesterday our fall continued as we hit an intra-day worst of R18.05 with further slippage to R18.10 this morning.   

Last Thursday’s shock 50bps interest rate hike by the Reserve Bank sent the Rand into the R17.70’s for the first time since early February, but a combination of poor local market data, recessionary fears in the US and tactical trades ahead of the looming long weekend have sent us back to R18.10.  Whether the past week was a Dollar buying opportunity in a longer term weakening trend for the Rand or just the signal of things to come remains to be seen, but fortunately we don’t have to wait long to find out.   

Softer US data saw recession concerns to the fore, with yields lower over the day and some safe-haven dynamics supporting the USD despite. Equities were a little lower, the S&P500 down 0.2%. The RBNZ yesterday drove home the contrasting approaches by the antipodean central banks, surprising markets with a 50bp increase. The US Services ISM surprised sharply lower than expected , falling to 51.2 from 55.1, remaining in expansion territory but only just and undershooting expectations for 54.4.

The largest part of the European Central Bank’s cycle of interest-rate increases is over, though more hikes may be needed to tackle core inflation, according to Governing Council member Boris Vujcic. While consumer-price gains are easing largely thanks to base effects underlying pressures that exclude volatile items like energy and food remain high, Vujcic said Wednesday in Croatia, whose central bank he heads. “The biggest part of the cycle of rate rises is behind us,” he said. But if core inflation remains above 4%, “further hikes” can be expected.

The increasingly closer relations between China and Russia and the Chinese push to make its currency more relevant on the global markets are challenging the dominance of the petrodollar. The U.S. dollar, which has been the currency of choice in oil trade since the 1970s, is still the dominant currency in the market and global currency reserves. But several recent deals and highest-level summits have sought to undermine the dollar’s dominance. The new geopolitical alliances, where China and Russia are working to oppose a U.S.-led global order, could undermine the petrodollar. 

Latest PMI data pointed to a further recovery in business activity across China’s service sector, with the rate of growth accelerating to a 28-month high. Increased activity levels were linked to sustained improvements in operating conditions and new order intakes following the recent easing of COVID-19 measures. Notably, new export business expanded at the quickest rate on record. Efforts to keep up with rising business requirements led to a solid upturn in employment.

Frenchman Bernard Arnault has dethroned former number one on Forbes’ richest billionaires list, Elon Musk. Musk, 51, is now just the second richest billionaire in the world, falling to Arnault, 74 the chairman of French luxury goods giant LVMH which owns brands like Louis Vuitton, Christian Dior and Tiffany & Co. The two had been trading places on the outlet’s daily Real-Time Billionaires list over the past few months, but Arnault superseded the Tesla billionaire after his net worth grew more than $50billion to $211billion. The number of billionaires in the world has dropped to 2,640 this year.

The Central Bank of Somalia’s top priority is to reestablish the nation’s currency, which will enable it to take full control of monetary policy, its governor said. Somalia hasn’t printed new banknotes since descending into a civil war after the government collapsed in 1991. Most of the bills that were in circulation disappeared or became too worn out to use. They were replaced by US dollars or counterfeit notes, often printed or shipped in by warlords and businessmen in breakaway regions. In 2017, the International Monetary Fund estimated that 98% of the local currency circulating in the economy was fake.