Nyheter
Can mining strikes offset currency headwinds?
Platinum and the Rand: Can mining strikes offset currency headwinds? Platinum prices have rebounded by over 20% during 2016, as the South African Rand (ZAR) has strengthened 4%. A stronger ZAR should constrain supply by narrowing already stretched mining company margins. Opposing forces are likely to keep price volatility elevated in coming months as a potentially weaker ZAR balances the threat of output cuts from strike action.
Economic conditions are challenging to say the least. South African growth is expected to be just 0.6% in 2016 according to the IMF, from 1.3% in 2015, the lowest in over six years. Rising social tensions are a result of burgeoning unemployment. Unemployment is at the highest level since records began in 2008, at nearly 27% of the population, according to Stats SA.
Drought is impacting food prices, driving inflation higher, and at the same time the central bank is raising rates to try and keep prices in check. Raising rates to offset supply side inflation and reduce capital outflows is a sign of desperation and the local currency is unlikely to be a beneficiary of such action. Indeed, the South African Reserve Bank notes that the weaker currency could be fuelling inflationary pressures.
As a general rule of thumb, investors should be wary of those EM countries that are tightening monetary policy to stave off capital flight, especially when there is little inflationary pressure and weak growth – South Africa is a good example. With lacklustre outlook for the economy, the Rand is likely to remain weak.
Early June sees the potential for a credit rating downgrade for South Africa from S&P Global Ratings, with consensus economist expectations that the country’s rating will enter junk territory by end-2016. The IMF’s most recent mission to the country suggests that the government’s budget target ‘may be challenging’. A decrease to non-investment grade is likely to prompt further capital outflows and see the ZAR move lower against the USD.
The close correlation between the currency and platinum should see metal prices follow ZAR lower in the near term. However, later in June, and with another supply deficit forecast in 2016, the platinum price is likely to receive support from potential output reductions resulting from contract negotiation activity and possible strike action[i].
(click to enlarge)
[i] Recent strike action in South Africa in 2012 and 2014 lifted the platinum price by 17% and 0.5%, respectively.
Martin Arnold, Global FX & Commodity Strategist at ETF Securities
Martin Arnold joined ETF Securities as a research analyst in 2009 and was promoted to Global FX & Commodity Strategist in 2014. Martin has a wealth of experience in strategy and economics with his most recent role formulating an FX strategy at an independent research consultancy. Martin has a strong background in macroeconomics and financial analysis – gained both at the Reserve Bank of Australia and in the private commercial banking sector – and experience covering a range of asset classes including equities and bonds. Martin holds a Bachelor of Economics from the University of New South Wales (Australia), a Master of Commerce from the University of Wollongong (Australia) and attained a Graduate Diploma of Applied Finance and Investment from the Securities Institute of Australia.
Since Trump began imposing tariff—starting with Colombia last week—global markets have been in turmoil. The latest round of tariffs on Canada, Mexico, and China, with threats extending to the EU, has triggered sharp declines across risk assets. Canada and Mexico’s retaliatory tariffs have added to the uncertainty, setting the stage for further volatility.
This reaction mirrors last year’s turmoil following the BOJ’s rate hike, reinforcing how macroeconomic shocks ripple through liquid markets like crypto. As capital swiftly reallocates, bitcoin’s dominance surged past 61.5%. With more geopolitical and economic shifts potentially ahead, we are monitoring bitcoin’s sensitivity to global financial conditions, which will remain a key factor for its price action.
Market Highlights
Trump imposes tariffs on imported goods
Trump imposed tariffs on all imported goods from Canada, Mexico and China, setting the stage for a trade war with US trading partners.
This brings volatility and uncertainty to risk assets, creating short-term headwinds that impacted crypto assets more heavily since it was the only market open during the weekend.
SEC eases crypto custody rules
SEC replaced SAB 121 (crypto custody as balance sheet liabilities) with SAB 122, letting firms assess liabilities under the current accounting standards in the US and worldwide.
This has made it more feasible for US banks to custody crypto and could encourage greater institutional participation, enhancing market liquidity.
In-kind bitcoin redemptions proposal
Nasdaq proposed in-kind BTC redemptions for bitcoin ETFs, with the potential to improve efficiency and reduce costs for issuers and investors.
The approval could make BTC ETFs more attractive to institutions and market makers by streamlining operations and capital efficiency, fostering a stronger ETF market for BTC.
Market Metrics
Trump’s tariff announcements on Friday created a strong headwind for digital assets at the end of last week, as crypto was the only liquid market open during the weekend. The NCITM responded with a 9.1% decline, losing its lead as the best performing asset YTD, but still up 3.0% in 2025. Despite recent headwinds, advancements in US crypto regulation and the steady pace of institutional adoption remain strong tailwinds for crypto as 2025 progresses.
Virtune AB lanserar två nya Crypto-ETPer på Nasdaq Helsinki
CEB1 ETF ger exponering mot statsobligationer från Eurozonen med 20 års löptid
Crypto tumbles on tariff developments
Vad är staking?
GMAY ETF spårar S&P 500 och utnyttja säljoptioner
Post-election rally cools at year end
Tio ETFer för att investera i fastigheter
AuAg Funds om gulds motståndskraft mitt i globala tariffer och stark dollar
Hur investera i afrikanska aktier med hjälp av börshandlade fonder?
Hur obligationer kan innebära långsiktig vinst
-
Nyheter4 veckor sedanPost-election rally cools at year end
-
Nyheter1 vecka sedanTio ETFer för att investera i fastigheter
-
Nyheter2 veckor sedanAuAg Funds om gulds motståndskraft mitt i globala tariffer och stark dollar
-
Nyheter2 veckor sedanHur investera i afrikanska aktier med hjälp av börshandlade fonder?
-
Nyheter3 veckor sedanHur obligationer kan innebära långsiktig vinst
-
Nyheter3 veckor sedanHANetfs Tom Bailey om utsikterna för koppar och uran
-
Nyheter5 dagar sedanDe mest eftersökta ETFerna i januari 2025
-
Nyheter2 veckor sedanTrump 2.0: The Art of the Crypto Deal
