USD = R18.17  AUD = R12.09
GBP = R22.25  DXY = 102.99
EUR = R19.57Brent Crude = $74.87 per barrel

With all the recent panic about an ever widening banking crisis things had settled down somewhat mid-week last week after UBS agreed to buy Credit Suisse while the FED hiked interest rates by 25bps but signalled they probably have just have one more hike left before calling it a day.  The market loves overreacting and it took Jerome Powell’s comments as proof that the FED will start cutting rates later this year, even though he said nothing of the sort, and the Dollar Index plunged allowing the Rand to touch R18.02 on Thursday.   

It was hoped that the Rand would nudge below the psychological R18.00 barrier but we didn’t get any help from the Bank of England on Thursday, and then from the European banking sector on Friday.  First came the BoE who, despite UK inflation moving higher to 10.4%, opted to go with a 25bps interest rate hike on Thursday while Governor Andrew Bailey said the bank expects inflation to fall “sharply”.  The Pound fell on these headlines lifting the Dollar Index, and then on Friday rumours started to swirl that Deutsche Bank is in trouble which sent safe haven flows to the Dollar.  The Rand fell back to R18.26 before closing the week at R18.15. 

Shares in Germany’s largest bank fell 8.5% on Friday and the cost of insuring its bonds against the risk of default jumped sharply and the index of top European bank shares .SX7P fell.

The sudden spike in tensions for banks has raised questions about whether major central banks will continue to pursue aggressive interest rate hikes to try to bring down inflation, and prompted some to speculate on when rates will start to fall.

Vladimir Putin said Russia is preparing to station tactical nuclear weapons in Belarus, escalating a confrontation with the US and its allies. The US will monitor the implications of Putin’s move, the White House’s National Security Council said. Putin also said Russia and China haven’t formed a “military alliance.” The head of the UN’s nuclear agency will travel to the Zaporizhzhia plant this week, the International Atomic Energy Agency said on its website. It will be the second time Rafael Mariano Grossi has crossed the front line in Ukraine to reach the facility, occupied by Russia for the past year.

A private island in Palm Beach could become the most-expensive home ever sold in Florida, if it gets its asking price of $218 million. Developer Todd Michael Glaser and his partners bought 10 Tarpon Isle the only private island in Palm Beach for $85 million in 2021. They built a brand new house, turned the existing structure into a guest house, and added a giant pool, tennis courts and other amenities and have now relisted the property.