SOUTH AFRICA
- SA was plunged into darkness when ESKOM implemented Stage 6 loadshedding.
- In addition, Business Unity South Africa (BUSA) sounded the alarm bells after Eskom stage 6 was implemented on Tuesday afternoon.
- The business lobby group said the severe outages will negatively impact an already ailing economy. NEWS24
- After Pravin Gordhan announced that the wage strike had been settled, unions NUM and NUMSA hit back and demanded he retract his comments.
- Eskom staff members affiliated with the unions have been staging an unlawful protest at the power utility since last week.
- This has resulted in the country experiencing stage 6 power cuts – said Eskom. EWN
- The SA government defended its plan to end special permits, that allowed more than 178,000 Zimbabweans to live and work in the country.
- The so-called Zimbabwe Exemption Permits, first granted in 2009.
- Clayson Monyela, head of SA’s public diplomacy, said “they were never meant to be permanent”.
- They are scheduled to expire in December.
- The department said only a small percentage of them have applied to regularize their stay. Moneyweb
- SA recorded foreign direct investment (FDI) inflows of R27.2 billion ($1.7 billion) in the first quarter of 2022.
- The amount was up from R22.7 billion in the Q4 quarter of 2021, the SARB said on Tuesday.
- The SARB’s Quarterly Bulletin, said the increase was due to foreign entities increasing equity investments and granting loans to domestic subsidiaries. SARB
GLOBAL MARKETS
Stocks:
- Wall Street remained under heavy selling pressure on Tuesday afternoon, giving up initial gains.
- New comments from Federal Reserve officials brought back concerns of an aggressive 75 bps rate hike in July.
- The NASDAQ, pressured by higher Treasury yields, led losses with a 2.3% drop, followed by the S&P 500, down 1.6%, and the Dow shed 1.3%.
- Both the San Francisco Fed and the New York Fed Presidents have come in support of an aggressive rate hike at the FOMC’s July meeting.
- They argued that decisive action on inflation was required to avoid further pain in consumers’ wallets.
- On the economic data front, US consumer confidence fell to a 16-month low in June amid persistent inflation concerns.
Bonds:
- The yield on the US Treasury 10-year note steadied above 3.2%, up 14 basis points as investors assessed the outlook for monetary policy ahead of the US PCE reading for May due later this week.
- The New York Fed reiterated the need to act aggressively to bring down inflation by raising the funds rate up to 3.5% by the end of the year
- Now, investors will be looking to the Federal Reserve’s preferred measure of inflation, which could provide further cues on its policy tightening path. Source US treasury
YESTERDAY
- The Dow fell 491 to 30,946
- The SP500 fell 78 to 3,821
- The Nasdaq declined 343 to 11,181
Futures Trading:
 image : Trading economics
OVERNIGHT HEADLINES
- Asian markets all lower following the sharp sell-off in NEW YORK.
- In Japan, the Nikkei 225 Index fell 1.1% to around 26,760, retreating from two-week highs, with chip-related stocks leading the decline.
- Japanese shares also tracked overnight losses on Wall Street, as a drop in June US consumer confidence dampened investor sentiment and highlighted the looming risk of a recession.
- Losses in the technology sector leading the way.
- In Australia, the ASX 200 Index fell 1.3% to 6,676, retreating from a two-week high and tracking overnight losses on Wall Street.
- Gold stocks led the declines due to weak bullion prices, with sharp losses from Newcrest Mining (-4%).
- Brent Crude oil remained above $110/bl after rallying more than 7% in the past three days.
- Industry data showed US crude inventories declined more than anticipated last week.
- The American Petroleum Institute reported a large draw of 3.799 million barrels, way worse than market expectations for a 110,000 barrel drop.
- The UK oil benchmark also jumped 2.5% in the previous session following reports that major producers Saudi Arabia and UAE are at, or very close to, near-term capacity limits.
- This comes ahead of an OPEC+ meeting this week, where the group is expected to stick to its policy of modest output increases. Energy news
- Gold declined to $1,820/oz, the lowest in two weeks pressured by US Treasury yields that remain at elevated levels.
- Gold is currently trading in correction territory, and the yellow metal is 12% off its March peak.
- Price pressured due to major central banks who continue to aggressively raise interest rates to target runaway inflation, even at the risk of an economic recession.
- The jump in US yield stalling the bullion rally. Kitco metals
- The US dollar regained ground around the 104.60, up from its daily lows of 103.70 following hawkish remarks from the New York Federal Reserve, .
- NY Fed chief Williams said that the US central bank must act aggressively to rein on the highest inflation since 1981.
- To do this it has to bring rates to between 3% and 3.5% by the end of this year.
- He pointed out that the world’s largest economy remains resilient and can endure such tightening.
- The most pronounced buying activity was against the Euro as ECB President Christine Lagarde offered no new information about the central bank’s policy outlook. FX news
COVID-19 SOURCE https://www.worldometers.info/coronavirus/
Cases / Deaths / Recoveries
WORLD 550,643,002 / 6,353,680 / 526,284,419
USA 89,030,727 / 1,041,354 / 84,708,599
SA 3,993,004 / 101,745 / 3,879,002
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