The US Federal Reserve announced, as widely expected, that it would start scaling back its pandemic-era bond purchases, a process known as “tapering“, by reducing its $120bn-a-month programme monthly by $15bn, which means it should end its support of the economy by the end of June or July next year. Fed chair Jerome Powell, however, kept a relatively dovish commentary regarding interest rates in line with their transitory position on inflation, pushing long bond yields higher. In the wake of the FOMC announcement, the dollar retreated, commodity prices fell, Wall Street notched records and emerging market currencies strengthened, comments TreasuryONE.
The decision to hold interest rates close to zero comes a day before a Bank of England policy announcement in which the UK is expected to hike rates by 0.1% to 0.25%.
The FOMC boosted the rand to close 1.10% stronger at R15.26 but this morning the local unit is a touch weaker against the greenback at R15.30 as the dollar started to recover from last night’s closing levels. “The rand needs to break below the R15.20/R15.25 area to open further strength back to R15.00; however, we are likely to track the movements in the dollar for now,” says TreasuryONE.
In other alarming news, a new, hidden epidemic is starting to lift its head. With more people jumping into cryptocurrency because of the hype, excitement, FOMO and how easy it’s become to trade the digital asset, experts are regarding crypto trading as a form of gambling addiction. Barcelona-based designer and visual journalist Matt Danzico has shone the light on the problem this week with his own tale of speculation, anxiety and anger over “years worth of money won and lost in a very short amount of time”. “If one small fraction of [the tens of millions of people trading cryptocurrencies] become hooked, we’re talking about a burgeoning potential mental health crisis on a scale that I don’t think that the world has ever seen,” he told AFP.
One of the few rehab clinics attempting to help people with crypto addictions, Castle Craig in Scotland, has described crypto addiction as a “modern day epidemic”.
In very good news, South African author and playwright Damon Galgut last night won the Booker Prize for “The Promise”, his ninth novel and the third to have been shortlisted for the £50,000 (R1m) prize since his first work was published at age 17. The award-winning work tracks the downfall of a white family over three decades and a deferred promise to give Salome, their black maid, her own home.
Here’s a roundup of the world’s top and most interesting headlines:
SA Business
Eight things to look out for in the medium-term budget – Fin24
Joburg is extending debt write-offs to ratepayers – here’s how much you qualify for, and the new cut-off date – BusinessTech
South Africa’s biggest company has sent a warning to government – BusinessTech
Global Business
Meet the finfluencers: TikTok’s investment gurus – AFP
A new weight-loss medicine is flying off the shelves – Bloomberg
Covid has caused 28m years of life to be lost, study finds – The Guardian
COP26
What would the world be like at 3°C of warming and how would it be different from 1.5°C? – The Conversation
190 nations and organisations pledge to quit coal – BBC News
How our wallets will save the world – Finextra
Markets
Asian markets rally as Fed unveils taper plan, says patient on rates – AFP
Sterling, euro gain on dollar after Fed announces taper – Reuters
‘Squid Game’ token goes offline after skyrocketing 75,000%, CoinGecko says ‘scam’ is over – Business Insider
Opinion/In-depth
It’s all about Eskom: What COP26 means for SA – Fin24
Non-fungible tokens and the 68 billion melody algorithm: The beginning of the end of copyright as we know it – Daily Maverick
The Amazon: a paradise lost? – AFP
Video
Forever young? – Prolonging the shelf-life of food – Deutsche Welle
Yahoo is latest foreign tech firm to leave China – AP
Hydrogen power – A German village goes it alone – Deutsche Welle
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