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Markets WRAP: The rand closed at R15.16/$

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23 Aug 2019

The rand closed at R15.16 to the greenback on Friday afternoon.

This after the local unit made a comeback earlier following Fed comments earlier in the day. TreasuryONE said in a note to clients that the Fed would most likely cut interest rates at the next FOMC meeting in September.


23 Aug 2019

Treasuries gained and stocks fluctuated after Federal Reserve Chairman Jerome Powell pledged to act as needed to sustain the expansion.

Benchmark 10-year yields halted a two-day advance after Powell’s remarks bolstered speculation that the central bank will cut rates next month. Equities rebounded from earlier losses that were triggered by China’s decision to hit back at the US with tariffs on $75 billion of imports. Oil fell.

Investors sought haven assets as the news from Beijing rekindled concerns about the outlook for global growth that’s already looking shaky. The announcement comes as leaders from the Group of Seven nations prepare to meet in France and central bankers gather in Jackson Hole, Wyoming, to discuss issues such as the economic slowdown.

Here are the main moves in markets:

Stocks

The S&P 500 rose 0.1% to 2,927 as of 10:40 New York time.The Stoxx Europe 600 Index increased 0.4%. The MSCI Asia Pacific Index climbed 0.3%.

Currencies

The Bloomberg Dollar Spot Index was little changed at 1,210.63. The euro was little changed at $1.1076. The Japanese yen was little changed at 106.43 per dollar.

Bonds

The yield on two-year Treasuries fell five basis points to 1.57%. The yield on 10-year Treasuries decreased three basis points to 1.58%. Germany’s 10-year yield fell two basis points to -0.66%.

Commodities

The Bloomberg Commodity Index decreased 0.1%.West Texas Intermediate crude fell 1.2% to $54.71 a barrel. Gold increased 0.9% to $1,521.50 an ounce. - Bloomberg

23 Aug 2019

Oil heads for second weekly increase before Fed chair’s speech

Saket Sundria and Grant Smith, Bloomberg

Oil headed for a second weekly gain as traders awaited guidance from the Federal Reserve on whether the US will ease monetary policy to shore up economic growth.

Futures were little changed in New York on Friday and are up 0.8% this week. Fed Chairman Jerome Powell will speak on Friday in Jackson Hole, Wyoming amid expectations the US will cut rates again next month.

Oil prices faltered in the previous two days after data showed an increase in American fuel stockpiles amid fading global demand.

“In the absence of either strong fundamental or macro-financial drivers, there aren’t many reasons for oil to attempt a rally,” said Harry Tchilinguirian, head of commodity markets strategy at BNP Paribas SA. “Global markets will just have to wait for Powell’s speech today for more guidance.”

Oil prices have recovered from a steep drop in early August, when the US-China trade conflict was threatening to escalate into a currency war. The White House has struck a softer tone since then, delaying the imposition of some tariffs and planning more meetings.

23 Aug 2019

Stocks climb with US yields before Powell speech

Adam Haigh, Bloomberg

Stocks in Asia advanced on low volumes along with US equity futures and Treasury yields as investors awaited Federal Reserve Chair Jerome Powell’s address at the Jackson Hole summit.

Gains were modest across the region, with trading activity below average in Japan and South Korea. Futures on the S&P 500 Index ticked higher after US shares closed flat amid weak volumes.

Three Federal Reserve policy makers voiced their resistance to the notion that the US economy needs lower interest rates, and a fourth saying he wanted to avoid taking further action “unless we have to.” The greenback edged higher, while China’s offshore yuan weakened to 7.1 per dollar.

Anticipation is building for Powell’s speech after a tumultuous August for markets amid concern over a slowing global economy and the escalating US-China trade war. Investors have priced in a quarter percentage-point US rate cut next month, but dissenting Fed voices may limit the prospects for the larger move that some have advocated, including President Donald Trump.

“The markets want more than the Fed is going to give here,” Alicia Levine, chief strategist at Bank of New York Mellon Corp., told Bloomberg TV. “There is real disagreement within the FOMC about where the U.S. economy is, and particularly the fact that the data has been stronger than one would expect. There’s a setup for Powell to disappoint the market.”

Elsewhere, the kiwi rose after New Zealand’s central bank governor said he could afford to wait before deciding whether to add more support for the economy. On Thursday, most euro-area government bonds fell as the European Central Bank expressed concern that investors were losing faith in its ability to revive inflation and after a gauge of German manufacturers reinforced recession concern.

ZAR/USD
16.67
(+0.79)
ZAR/GBP
21.04
(+0.81)
ZAR/EUR
18.95
(+0.26)
ZAR/AUD
11.65
(+0.20)
ZAR/JPY
0.16
(+1.10)
Gold
1807.22
(+0.41)
Silver
19.21
(+2.45)
Platinum
844.55
(+2.39)
Brent Crude
43.05
(0.00)
Palladium
2045.50
(+4.33)
All Share
56104.76
(+1.24)
Top 40
51775.72
(+1.22)
Financial 15
10692.90
(+2.11)
Industrial 25
76693.01
(+0.73)
Resource 10
53292.56
(+1.54)
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