Morning NOTE

GOOD MORNING

• USDZAR 15.6500
• EURZAR 16.8200
• GBPZAR 19.9900

SOUTH AFRICA   

• KZN authorities are still tallying up the total cost of the damage caused by devastating flooding.
  • Various government ministers have been touring affected areas since flood waters receded.
  • The cost of the damage caused to water and sanitation infrastructure alone has been put at more than R1 billion.
  • Rail infrastructure has been damaged or destroyed to the tune of over R950 million. EWN
• In addition, Sasol has declared force majeure on the export of certain chemical products.
  • The group, a producer of synthetic fuels and chemicals, said its quarterly volume outlook may also be impacted. IOL
• In a blow for commercial game farmers, there appears to be an increased move by municipalities to change their property rates policies.
  • The move would allow them to bill game farms on a commercial rather than agricultural scale.
  • In Mangaung, the latest to propose such a change, it means owners of game farms will pay 15 times more from July 1, should the proposal be adopted. Moneyweb

Stocks:

• US stock futures fell on Monday after Wall Street capped another losing week.
  • Traders worrying about  faster Fed tightening.
    • The major bourses traded lower last week, with the Dow( -1.9%), and the S&P 500 and Nasdaq Composite falling 2.8% and 3.8%, respectively, posting their third straight weekly decline.
    • Investors also watching Twitter, which reportedly is re-examining Elon Musk’s takeover bid after the billionaire investor disclosed he secured $46.5 billion in financing.
    • In addition, another busy week for  earnings week.
      • Big tech reports, which includes Amazon, Apple, Alphabet, Meta Platforms and Microsoft.

• The US 10 Year Bond traded at 2.84%. US Treasury yields hovered near multi-year highs.
  • Investors were preparing for a series of rate hikes in the US, amid soaring inflation.
    • Fed Chair Jerome Powell said last week that the central bank committed to taming inflation, opening the door for a 50 bps interest rate hike in May.
  • Traders also concerns on expectations of more aggressive interest rate increases by major central banks.

• The Dow fell 981 points to 33,811 (-2.82%)
• The SP500 fell 121 points to 4,271  (-2.77%)
• The Nasdaq declined 335 points to 12,839 (-2.55%)
• image source: Trading Economics

• Asian markets all lower following the route on Wallstreet on Friday. The decline in New York setting off a wave of selling.
  • In Japan, the Nikkei 225 fell 1.9% to close at 26,591 retreating further from recent highs, as Japanese shares tracked a sharp selloff on Wall Street.
    • Traders worried over rapid US rate hikes and slowing global growth.
    • Investors also watched the yen’s continued weakness. All sectors in Japan traded in negative territory, with sharp losses from index heavyweights including SoftBank Group (-7.8).
    • In addition, Nissan Motor shares dropped 5.1% following a Bloomberg report that Renault may sell part of its stake in the Japanese company in order to focus more on electric vehicles.
  • In China, the Shenzhen market declined 5% on the back of Wallstreet.  TE
• Crude oil, fell 3%  to end at $98/bl., the price hitting its lowest in nearly 2 weeks.
  • Demand concerns remain on a prolonged Covid lockdown in China and rapid rate hikes in the US.
  • Monday’s slump extended a nearly 5% drop in the US oil benchmark last week as demand concerns remain at the front and centre.
  • Bloomberg reported, which is equivalent to a drop in crude oil consumption of about 1.2 million barrels a day.
  • Meanwhile, investors remained cautious as the worsening crisis in Ukraine could pressure the EU to sanction Russian oil and spur another rally. Energy news

• Gold fell to $1911/oz and extended its sell-off from the previous session and hitting its lowest in nearly 3 weeks.

  • Traders citing the prospect of faster Federal Reserve policy tightening continued to support the dollar and US Treasury yields, while decreasing demand for bullion.
    • Fed officials were committed to “front-end loading” inflation-fighting efforts, as Powell mentioned 50 bps hikes on the cards.
  • Gold declining as the dollar hit fresh 2-year highs following the remarks, while benchmark 10-year US yields held near 3-year highs. Kitco metals
• The US dollar recovered its losses and strongly traded above 101, as prospects of higher rates boosted demand for the Greenback.
  • Last week Fed chair Powell, confirmed the Fed will work to step up its inflation fight, as it looks to hike rates at 50bps per session.
  • The buck supported by the prospect of faster Federal Reserve policy tightening and as investors sought safety due to economic and geopolitical uncertainties.  Fx news

RUSSIA / UKRAINE

• U.S. Secretary of State Antony Blinken and Defence Secretary Lloyd Austin visited Ukraine on Sunday to discuss military aid with Ukraine’s President Volodymyr Zelenskyy.
  • The meeting held in in Kyiv — was deemed top secret and details only released after the Americans had left the country.
  • The U.S. pledged just over $700 million in military financing to help Ukraine and other allied countries in central and eastern Europe involved in the war effort. Bloomberg
• Reuters reported that there are now 370,000 Ukrainian refugees in Germany.
  • Germany’s federal police has recorded 376,124 refugees from Ukraine to date, according to the country’s Interior Ministry.
  • These are predominantly children, women and elderly people.

• WORLD 509,596,776 / 6,243,270 / 462,470,409
• USA 82,662,748 / 1,018,335 / 80,465,351
• SA 3,762,911 / 100,303 / 3,633,297