GOOD MORNING
The ZAR weakened to 16.1900, in thin holiday trading after a spike in US yields sent the Dollar higher across the board.
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OPENING RATES
- USDZAR 16.0900
- EURZAR 16.9100
- GBPZAR 20.1300
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SOUTH AFRICA
- DA Leader Steenhuisen landed in the Ukraine on a fact finding mission. The Leader of the opposition, “ wanted to see for himself”.
- Steenhuisen said the knock-on effects of the war were hard felt in SA , as Fuel prices continue to spike.
- He concluded, in the era of fake news, “…”We owe it to the people of Ukraine to tell the unfiltered truth about what is taking place there…” NEWS 24
- Andrew Levy, a labour economist said the future of labour unions does not look good unless they are able to reinvent themselves.
- He said “… If we look worldwide, unionism is not the currency of the 21st century and in SA, membership has dropped significantly with all the job losses. EWN
- South Africa has recorded 3,838 new COVID-19 cases in the past 24 hours.
- This is a representation of 22% positivity rate of infections in the latest period under review.
- ZERO deaths were however reported, with the current number at 100,370
- South Africa’s President Cyril Ramaphosa had to leave a May Day rally after workers stormed the stage where he was speaking.
- Chanting “Cyril must go,” they held up signs demanding a wage increase during a ceremony in a stadium near the north-western city of Rustenburg.
- Workers striking at the nearby Sibanye gold mine disrupted the event. BBC
GLOBAL MARKETS
Stocks:
- US stock climbed on Tuesday after the major averages staged a sharp intraday reversal to end higher overnight.
- In the USA session on Monday, the tech-heavy Nasdaq Composite jumped 1.63% in a late-day comeback, despite falling as much as 1.07% earlier in the session.
- The Federal Reserve is widely expected to raise interest rates by 50 basis points this week, with some analysts believing expectations of aggressive monetary tightening are already priced into markets.
- Meanwhile, the earnings season continues with Pfizer, Airbnb, AMD, Lyft and Starbucks set to report Tuesday, among others
Bonds:
- The yield on the 10-year US Treasury, topped 3% for the first time since December 2018.
- Investors doubled down on bets that the Federal Reserve will deliver the first of many 50bps interest rate hikes this year.
- With inflation running at 40-year highs and the job market extremely tight, the Federal Reserve had no choice but to change the narrative, signalling a faster tightening. source: U.S. Department of the Treasury
YESTERDAY
- The Dow gained 84 to 33,061
- The SP500 added 23 to 4,155
- The Nasdaq added 201 to 12,536
 image source: Trading Economics
OVERNIGHT HEADLINES
- Asian markets lower ahead of tomorrows FED meeting.
- In Japan the Nikkei 225 Index eased 0.1% to 26,818, after posting strong gains in the previous session, as investors remained cautious ahead of a key Federal Reserve meeting later this week.
- Locally, a private survey showed over 40% of Japanese companies are planning to raise prices within a year amid rising material costs driven by the pandemic and the Ukraine war.
- In Australia the RBA surprised the market by hiking 25 bps vs an expectation of 15 bps.
- The ASX 200 Index fell 0.42% to close at 7,316, extending losses in the previous session.
- Traders citing the RBA raising its official cash rate for the first time in more than 10 years, in response to surging inflation, and signalled more rate increases to come.
- Iron-ore miners and steel-producing firms led the decline. TE
- Crude oil rose above $105/bl after settling higher in the previous session.
- Traders citing increased demand for refined products exceeding fears of Covid-induced demand slowdown in top importer China.
- Global supply remains under pressure on the shunning of Russian cargoes.
- Meanwhile, traders tracked developments around the EU as it is reportedly leaning toward banning Russian oil imports by the end of year,
- Oil prices have climbed in the past five months as Russia’s invasion of Ukraine exacerbated supply disruptions caused by the Covid pandemic.
- Earlier, Iran and Venezuela met to discuss their situation regarding sanctions and oil productions. Energy News
- Gold traded at $1855/oz , hovering near its lowest levels since mid-February, as expectations for a half-point interest rate increase from the Federal Reserve this week pushed Treasury yields higher.
- The spike in yields pressuring bullion prices.
- On Monday, the US 10-year US yield hit 3%; for the first time since December 2018.
- Traders see this as a psychological milestone that could have major implications for other financial markets.
- The dollar index also held near 20-year highs on rate hike bets and safe haven inflows, denting demand further for the precious metal. Kitco metals
- The dollar hit 103.60 and in turn settling near a 19-year high hit last week, as traders prepared for a key Fed meeting tomorrow.
- Investors widely expect the FED to raise interest rates by a hefty 50 basis points.
- The spike in PCE data, the Fed inflation measure, dominated investors sentiment and traders largely ignored, the weaker-than-expected Q1 US growth data.
- In addition, fears of an economic slowdown in Europe and China driven by the Ukraine war and Covid lockdowns, respectively, spurred safe haven flows into the dollar. FX news
RUSSIA / UKRAINE
- SA DA leader Steenhuisen is visiting the Ukraine on a fact finding mission. EWN
- The U.K. will pledge more rapid arms supplies for Ukraine as the country tries to fend off a renewed Russian assault in the east and south.
- On Tuesday, the U.K.’s Prime Minister Boris Johnson announce a new £300 million ($375 million) package of defensive military aid while addressing the Ukrainian parliament via videolink. BBC
- A senior U.S. Defence official said at a briefing that Ukraine’s forces have “managed to push the Russians out about 40 kilometers [25 miles] to the east of Kharkiv.” The city is still under aerial bombardment.
- Kharkiv has been under sustained attack since late February, and most its civilian residents have fled the city. CNBC
COVID-19 SOURCE https://www.worldometers.info/coronavirus/
Cases / Deaths / Recoveries
- WORLD 514,017,386 / 6,263,363 / 468,644,823
- USA 83,170,407 / 1,021,089 / 80,757,424
- SA 3,798,413 / 100,370 / 3,651,665
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