Markets WRAP: Rand ends the day weaker at R14.30/$

Rand ends the day at R14.30/$

The rand lost ground on Tuesday, closing just over 1% weaker at R14.30 to the greenback.

The local unit opened at R14.15/$. After US markets opened, the dollar rallied which saw the rand trade 0.9% weaker.

Bianca Botes of Peregrine Treasury Solutions attributed the rand's weakeness to the bailout of Eskom, and US President Donald Trump reportedly entering into a trade conflict with the EU.   

The day's trade ranged between R14.13/$ and R14.33/$.

Rand tumbles as US markets open

The rand has tumbled as US markets have opened, with the local unit losing close to 0.9% during trade on Tuesday, Bianca Botes corporate treasury manager at Peregrine Treasury Solutions noted in a market update.

"The rand’s decline can be largely attributed to the bailout of embattled state-owned enterprise Eskom as well as Trump entering into a trade conflict in the European Union, promising retaliation with regards to tariffs," she said.

"The rand is currently trading at R14.27 against the USD."

US stocks advance on earnings as dollar rallies

US equities climbed on the back of better-than-forecast earnings, while the dollar strengthened and Treasury yields dipped.

The S&P 500 Index, trading near the highest valuation since September, extended its advance as Twitter, Coca-Cola and Hasbro climbed following favourable first-quarter reports.

Banks were the worst performers in the Stoxx Europe 600 Index, which held steady as many markets reopened following the long Easter weekend.

The pound weakened as UK Prime Minister Theresa May confronted further challenges to her leadership.

The rand and the JSE Top 40 were both trading weaker in the early afternoon on Tuesday. 

The local currency opened the day at 14.15/$ and was changing hands at 14.19 to the greenback at 13:10, down 0.2% on the day. 

The JSE Top 40, meanwhile, was down 0.28% in the early afternoon at 52 732.32 points. 

Eskom bailout puts rand under pressure

The rand looks set to trade under pressure on Tuesday as the Eskom bailout filters through global markets, according to Bianca Botes, corporate treasury manager at Peregrine Treasury Solutions.

Oil climbs toward $75 as Trump tightens screws on Iran

Sharon Cho and Grant Smith, Bloomberg

Oil rose toward $75 in London on Tuesday after the US announced a tougher crackdown on Iran, seeking to choke off the OPEC member’s crude exports.

Brent futures advanced 0.8% to the highest since November after Secretary of State Mike Pompeo said that US sanctions will apply to all purchases of Iranian oil as of next month, ending the waivers currently granted to several customers.

Even though Saudi Arabia promised to help ensure global markets remain adequately supplied, the move stirred fears of shortages and escalating military tensions in the Gulf. Oil had already climbed almost 40% this year as the Organization of Petroleum Exporting Countries and its partners reduced production, both through deliberate cuts and internal strife in a number of members.

Iran’s output has been sliding since American sanctions were reimposed last year, while Venezuela’s plunged because of a chronic economic crisis and Libyan exports are imperiled by a new round of fighting.

“Zero Iranian exports will naturally have an impact on the actual supply in the market at a time that heavy oil supplies are less than usual,” said Sara Vakhshouri, head of Washington, D.C.-based consultant SVB Energy International. “This is also happening as summer approaches and the U.S. demand for gasoline hits the peak” resulting in “significant consequences on the oil market and prices.”

Mr Price to list on A2X

The Mr Price Group is set to become the latest South African company to list on the A2X Markets exchange.

A2X, which has been active since October 2017, is a licensed stock exchange which provides secondary listings for SA companies.

In an update to shareholders on Tuesday, Mr Price said it would retain its primary listing on the Johannesburg Stock Exchange. Its issued share capital will be unaffected by the secondary listing on A2X.

Mr Price Group’s ordinary shares will be available to be traded on both the JSE and A2X from the A2X listing date of May 2, 2019.  

Asian stocks fluctuate; dollar edges higher

Andreea Papuc, Bloomberg

Stocks in Asia fluctuated Tuesday as investors look to a deluge of earnings for reasons to carry an equity rally further. The dollar and 10-year Treasuries rose.

With all the region’s markets on deck after the Easter holiday, equities posted modest gains in Japan, while they swung from gains to losses in narrow ranges in Hong Kong and China.

Australia had the biggest advance, led by energy producers. Energy stocks on the MSCI Asia Pacific Index also outperformed after oil jumped to a six-month high as the White House said it will scrap waivers that allow the purchase of some Iranian crude.

Volumes were below 30-day averages throughout Asia ahead of Japan’s Golden Week extended holiday.

European futures signaled stocks will rise after the Easter holiday weekend shut trading in much of Europe Monday.

Traders have a week full of company earnings releases to look forward to, in particular from major technology firms. They’ll also be focused on the US economy, with first-quarter gross domestic product data due Friday.

With corporate reporting season in full flow, investors are looking for clues as to whether the dovish policy pivot from the world’s central banks can shore up global growth enough to outweigh any weakness in earnings.

In the previous session, the S&P 500 Index closed about 1 percent below its all-time high.

“Some of the world’s biggest technology companies are reporting earnings this week as well as a raft of the big European banks,” Nick Twidale, chief operating officer at Rakuten Securities Australia, said in a note to clients Tuesday. “Investors will be hoping for some better-than-expected results from both groups to keep the topside momentum in global equities. If the data starts to show a significant slowing across these key industries then expect both stocks and risk trades to start to come under some heavy pressure.”

Elsewhere, Sri Lankan stocks plunged and bonds fell for a second day after terror attacks on Easter Sunday killed more than 300 people. The Colombo All-Share Index tumbled as much as 2.6 percent, the most in more than four years, as the Colombo Stock Exchange reopened for trading.