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Markets WRAP: Rand closes at R14.11/$

2019-04-04 08:04

"News from further afield is that the trade talks between the US and China are heading for a conclusion which can give the rand the necessary shot in the arm to break lower and challenge the R14.00 level," says TreasuryONE's Andre Botha.

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Last Updated at 01:12
04 Apr 17:18

The rand closed at R14.11 to the greenback on Thursday afternoon.

The day's range was between R14.08 and R14.22.

TreasuryONE's Andre Botha said earlier that the rand drifted "sideways" on Wednesday as it was mostly treated as a "no news is good news sort of day". 

“Minister of Public Enterprise stated that Eskom is working hard to ensure that there would be no blackouts until August with the stage 1 load shedding being the worst-case scenario.

"The rand enjoyed this statement but it was not enough to break out of the R14.10-20 level that the rand seems to be trapped in. 

"News from further afield is that the trade talks between the US and China are heading for a conclusion which can give the rand the necessary shot in the arm to break lower and challenge the R14.00 level.

"Direction could be given by the US non-farm number that will be released tomorrow. A bad jobs number could see the rand smiling and we could test lower even before any news on a possible US-China deal will hit the wires.

"A better than expected number could see the rand slide a little weaker and give fresh impetus for the rand to stay on the weaker side in the short term.”


04 Apr 16:48

Stocks mixed amid trade deal watch, dollar gains

US stocks were mixed and the dollar strengthened as investors awaited further news from US-China trade negotiations and key jobs data tomorrow in Washington.

Boeing propelled the Dow Jones Industrial Average into positive territory for a second day, while Tesla weighed on the Nasdaq after reporting a record decline in first-quarter deliveries.


04 Apr 16:17

Steinhoff execs resign from KAP board 

Two Steinhoff [JSE: SNH] executives on the board of KAP Industrial Holdings have tendered their resignations, following the reduction of the retailer's indirect 26% stake in KAP.

According to a shareholder notice from KAP on Thursday, the resignations of Messers TLR de Klerk and LJ du Preez, is effective from April 3, 2019.

De Klerk and du Preez had served on the KAP board since September 1, 2017.


04 Apr 13:01

Oil retreats from near $70 after US crude stockpiles surge

Grant Smith and Saket Sundria, Bloomberg 

Oil retreated further from near $70 a barrel in London, a level not breached since November, as a surprise surge in US crude stockpiles showed that markets remain adequately supplied.

Brent crude futures, the international benchmark, slid 0.5%.

American stockpiles rose by the most since January last week, according to Energy Information Administration figures on Wednesday, with a 7.24 million-barrel increase that surpassed analyst and industry estimates.

Still, optimism that the US and China are getting closer to a trade agreement is bullish for prices.

Oil has climbed 28% in London this year with growing consensus the Organization of the Petroleum Exporting Countries and its allies’ output-cut deal will probably be extended.

Unplanned supply losses from Iran and Venezuela are also increasingly tightening the market. But as clouds linger over the global economy, and a new flood of shale-oil pours in from the US, the rally has failed to reach last year’s highs.

“The market is still licking its wounds after that bullishness,” said Bjarne Schieldrop, Oslo-based chief commodities analyst at SEB AB. “There is quite a strong view in markets that Brent should not move too far from the $60 line as it should be checked by shale.”

Brent for June settlement traded 31 cents lower at $69 a barrel on the London-based ICE Futures Europe exchange at 10:43 local time.

The global benchmark crude was at a premium of $6.73 to West Texas Intermediate.

WTI for May delivery declined by 24 cents, or 0.4%, to $62.22 a barrel on the New York Mercantile Exchange, after falling 0.2% on Wednesday.

US inventories expanded as domestic production climbed to a record and exports fell for a second week, according to the EIA.

However, the data showed a tighter picture for refined products, as distillate stockpiles fell faster than normal for the time of year and gasoline supplies contracted for a seventh week.

Separately, there’s growing optimism that the US and China will soon resolve their protracted trade dispute. The deal that the two nations are crafting would give Beijing until 2025 to meet commitments on commodity purchases and allow American companies to wholly own enterprises in the Asian nation, according to three people familiar with the talks.

Negotiators are “making good headway,” said Larry Kudlow, President Donald Trump’s top economic adviser. “But we’re not there and we hope this week to get closer,” he said.


04 Apr 11:15

Global rally in stocks loses momentum 

Todd White, Bloomberg 

The global rally in stocks lost momentum on Thursday while bonds recovered ground alongside gold as investors awaited further news from US-China trade negotiations and key jobs data tomorrow in Washington.

The Stoxx Europe 600 index fell, led by declines in oil companies and miners. While equities advanced in China, stock markets were mostly lower across Asia, and the region’s benchmark index slipped from a six-month high. Futures on the S&P 500 Index edged down.

Treasuries climbed with most sovereign bonds in Europe. The pound held three days of gains after the UK's House of Commons passed a bill to block a no-deal Brexit.

The euro was steady despite a slump in German factory orders.

US President Donald Trump will meet Chinese Vice Premier Liu He at the White House on Thursday, as negotiations over a trade deal between the world’s biggest economies enter what could be the final stages.

The deal being crafted would give Beijing until 2025 to meet commitments on commodity purchases and allow American companies to wholly own enterprises in the Asian nation, according to three people familiar with the talks.

While investors have become more optimistic that a trade deal will be signed, it “may just be another step in the process,” Nick Twidale, chief operating officer at Rakuten Securities Australia, said in a note.

The implementation of any deal “will most probably provide obstacles in the process and may weigh on sentiment further down the track.”

Elsewhere, West Texas crude edged lower but held above $62 a barrel. Indian bonds declined and the rupee had its biggest drop since early January, after the nation’s central bank cut its key rate.


04 Apr 08:48

The rand is stuck in a R14.10/R14.20 range, TreasuryONE said in a morning note to clients.

"(This) is supported by a statement from (Public Enterprises Minister) Pravin Gordhan that there will be no further blackouts. This was tempered somewhat by the fact that Eskom's further financial crisis is worse than previously stated."

Gordhan also said that should load shedding be implemented, it will likely be at Stage 1 - at least until August.

By 08:46, the rand was trading at R14.19 to the greenback.

"The Dollar is unchanged against the majors this morning as markets await fresh news on the currency direction. Friday’s jobs data might give us a push as well as any trade deal statement. 

"Equity markets closed in the green and Treasury yields were higher.

"Gold and Palladium are treading water at $1 292.70 and $1 413.20 respectively while Oil is holding above $69.00. Look out for US jobless claims numbers out this afternoon."


04 Apr 08:05

Asian stocks mixed after rally to a six-month high

Andreea Papuc, Bloomberg

Stocks in Asia were mixed Thursday after a regional gauge rallied to a six-month high. Sovereign-bond yields retained their recent gains as investors await further results from US-China trade negotiations.

Shares in Australia sank, while those in Tokyo were little changed and Hong Kong equities declined.

Chinese and South Korean equities advanced. The S&P 500 Index edged up to the highest since October on Wednesday.

Australian bonds declined, tracking an overnight move lower in Treasuries.

The pound held gains after the UK's House of Commons passed a bill to block a no-deal Brexit.

Investors are looking for fresh catalysts to sustain an equities rally that so far has weathered underwhelming global-growth data. The MSCI Asia Pacific Index is up 11% this year.

While investors have become more optimistic that a US-China trade deal will been signed, it “may just be another step in the process as the implementation of any deal will most probably provide obstacles in the process and may weigh on sentiment further down the track,” Nick Twidale, chief operating officer at Rakuten Securities Australia, said in a note.

The deal that the US and China are crafting would give Beijing until 2025 to meet commitments on commodity purchases and allow American companies to wholly own enterprises in the Asian nation, according to three people familiar with the talks.

One notable move in Asian trading Thursday: Chinese airline stocks in Hong Kong jumped with gains of as much as 20% on a government plan to cut some fees.

Elsewhere, West Texas crude is trading above $62 a barrel.


04 Apr 08:05

Sanlam confident about Moroccan partnership

Sanlam says it is confident about the sustainability of its partnership with Saham Finances SA after it was criticised by a prominent Moroccan financial figure over the SA government's support for Western Sahara. 

On Tuesday Bloomberg reported that Moroccan billionaire Othman Benjelloun spoke out against Sanlam’s acquisition of the insurer, saying the SA government has chosen the wrong side in the territorial dispute.


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