Markets WRAP: Rand closes at R14.12 to the US dollar

Oil set for best month since January before two crucial meetings

Saket Sundria, Bloomberg

The US-Iran standoff and falling American stockpiles have propelled oil toward its biggest monthly gain since January but two crucial meetings in the next few days will determine whether the rally continues.

Futures in New York declined Friday, paring their advance in June to around 11%. Investors are focused on the meeting Saturday in Osaka between the US and Chinese leaders for any progress on defusing the trade war. OPEC and its allies will then gather in Vienna on Monday and Tuesday to decide on the group’s production levels.

Growing gloom over the global economic outlook spurred by the trade war snubbed out oil’s rally in late April, and pushed it down more than 20% before attacks on tankers in the Middle East gave prices a lift.

While US President Donald Trump has threatened this week to impose more tariffs on Chinese goods, there is some hope he may agree to another truce while negotiations resume.

Meanwhile, most analysts expect the Organization of Petroleum Exporting Countries to roll over their output cuts for the rest of the year.

“The market is just being very cautious right now because of the two very big events coming up back to back,” said Howie Lee, an economist at Oversea-Chinese Banking Corp. in Singapore. Crude may rally further if there’s at least a pause in the trade war and if OPEC+ extend their output cuts, he said.

Asian stocks slip ahead of key Trump-Xi trade meeting

Adam Haigh, Bloomberg

Stocks in Asia slipped on below-average volumes Friday, ahead of the highly anticipated US-China presidential meeting Saturday that could determine the next chapter in the trade war between the world’s two largest economies.

Losses were steepest in Shanghai, with indexes in Tokyo, Hong Kong and Sydney seeing moderate declines. European and US stock futures were little changed following a modest gain on Wall Street Thursday.

American lenders from Goldman Sachs Group to Bank of America climbed in after-hours trading after announcing share buybacks in the wake of annual Federal Reserve stress tests. Ten-year Treasury yields lingered just above 2%, and the dollar was little changed. Gold advanced.

Public Investment Corporation pressured by union to rescue Edcon

South Africa’s biggest labour union federation Cosatu signalled a "massive fight" with the ANC if state-owned fund manager the Public Investment Corporation failed to rescue the country’s second-largest clothing retailer, Edcon Holdings. 

A week after a senior labour union official sent an email on February 22 to the country’s then deputy finance minister, the PIC, which manages more than R2trn of mainly government worker pensions, led a R2.7bn investment in Edcon, two people with direct knowledge of the situation said.