Market Commentary | The week that was

Welcome to our first weekly commentary of 2023.

Warm winter saves Europe: Plans by Russian President Vladimir Putin to squeeze Europe by weaponising energy seem to be fizzling, at least temporarily. Mild weather, a larger variety of providers, and initiatives to cut demands are all helping, with gas supplies remaining largely full and prices falling to pre-war levels.

Loadshedding pattern to continue: Eskom has been battling numerous problems, including a constant struggle due to frequent unit breakdowns at many power stations. This has led to a lack of generating capacity. The power utility lowered the rolling blackouts to stage 3 on Monday morning until 4pm, however, stage 4 will be back until 5am on Tuesday.

SA’s first case of the new, XBB.1.5 coronavirus variant: According to Maria Van Kerkhove, Covid-19 technical head at the World Health Organisation (WHO), XBB.1.5 “is the most transmissible sub-variant” detected so far. It was nicknamed the "kraken variant", because of its ability to spread. Fortunately, there hasn’t been significant differences in severity of cases of the new variant and other variants.

Markets: The rand strengthened a little against the US dollar but remains above R17.00/$. The rand will probably continue to be volatile in the short term as developing markets keep on swaying due to news from the United States, where a global recession remains a big threat. On Monday (9 January), the rand was trading at R17.06/$, R18.21/€, and R20.71/£. Brent crude traded at $79.42 a barrel. Bitcoin and Ethereum have jumped on the risk wave and finally the 17,000 level has been taken out. Currently, they sit at 17,200 and 1,311 respectively.

Looking at the week ahead: China’s Consumer Price Index (CPI) will be released on Thursday with trade data due on Friday, and US inflation data will be out by Thursday.