Markets WRAP: Rand closes at R14.30/$

The rand closed at R14.30 to the greenback on Friday afternoon.

The day's range was between R14.30 and R14.44.

TreasuryONE said earlier that President Cyril Ramaphosa's State of the Nation Address on Thursday evening was, by general concensus, full of dreams but little in the way of detail. The rand did not react, it said.

"The one positive was the confirmation that the SA Reserve Bank's mandate would not change," said TreasuryONE, referring to Ramaphosa's statement during the speech that the SARB would remain independent.

Enslin resigns from Discovery board to take up Google job 

Robert Enslin has stepped down as a non-executive director of Discovery Limited with immediate effect, following his appointment as President of Google Cloud Services’ Global Customer Operations.

"The Board wishes to thank Mr Enslin for his invaluable contribution to the Group since his appointment in May 2017 and wishes him well in his new role," Discovery said in a statement on Friday. Enslin was appointed an independent non-executive director of the group's board in May 2017.

The SAP veteran was announced as Google Cloud’s new President of Global Customer Operations in mid-April 2019.

"Rob’s expertise in building and running organizations globally, business acumen and deep customer and partner relationships make him a perfect fit for this crucial role," Google said in a statement in April. 

Oil heads for weekly increase on heightened US-Iran tensions

Sharon Cho and Grant Smith, Bloomberg

Oil in London headed for its biggest weekly gain since February as escalating tensions between the US and Iran fanned fears of conflict that would disrupt energy supplies from the Middle East.

Brent crude rose 0.5% on Friday, bringing its increase for the week to 4.5%. President Donald Trump initially ordered military strikes against Iran on Thursday in response to the downing of a U.S. spy drone, but then called them off, according to an administration official.

Hostility in the oil-rich region has escalated recently with a missile strike by Yemeni rebels on Saudi Arabia and an attack on tankers near the Strait of Hormuz, which the U.S. blamed on Iran.

The drone was shot down to send a “clear message” to the White House, an Iranian military officer said, according to a story published by Iranian state-run media on Thursday. Despite crude’s recent rally, an entrenched US-China trade war has dented the demand outlook and weighed on prices over the past two months.

Washington and Beijing are set to resume talks next week, providing a glimmer of hope for the global economy.

“Given this week’s escalation in drone, missile and rocket attacks across the Middle East, traders will be reluctant to go into the weekend holding any shorts,” said Vandana Hari, founder of Vanda Insights in Singapore. “If the situation appears to deteriorate through the day, expect more length to be stacked on.”

Brent for August settlement rose 34 cents to $64.79 a barrel on London’s ICE Futures Europe Exchange as of 10:35 a.m. local time, after closing up 4.3% on Thursday.

Prices are heading for the first weekly gain since mid-May.

West Texas Intermediate for August delivery advanced 12 cents to $57.19 a barrel on the New York Mercantile Exchange.

The July contract, which expired Thursday, closed up 5.4%. Futures traded at a $7.61 discount to Brent. As a result of the contract rollover, WTI’s weekly increase was even bigger than Brent’s, at almost 9%.

Asian stocks slip at end of best week since January

Adam Haigh, Bloomberg

Asian stocks were mostly lower on Friday, while heading for their biggest weekly gain since January as investors embraced the decisive shift by central banks back to stimulus mode. The S&P 500 Index closed at a record high overnight.

Japanese, South Korean and Australian shares dipped, while Hong Kong’s benchmark fluctuated and Shanghai shares rose. European and U.S. futures pared losses. Oil dipped after renewed tensions between the US and Iran sent crude soaring.

The dollar steadied after slumping in the wake of the Federal Reserve’s signal for lower interest rates, while gold traded above $1,400 an ounce for the first time since 2013.

In Japan, 10-year yields dipped after the Bank of Japan left its bond-buying operations unchanged at a regular operation Friday. While they are near the bottom of officials’ target range - at negative 0.18% against a theoretical floor of minus 0.2% - BOJ Governor Haruhiko Kuroda said Thursday that zone should be thought of flexibly.

The yen hit its high of the session Friday after the New York Times reported that President Donald Trump had approved strikes against Iran in retaliation for downing a US drone, but then called off the operation.

Central banks in the US, Europe and Australia were among those signalling a readiness to do more to support growth this week. That’s helped fueled gains for equities while putting increased pressure on sovereign bond yields as the trade war rumbles on.

Next week, the trade issue is back up: U.S. President Donald Trump and Chinese President Xi Jinping are set to meet during the Group of 20 summit in Japan next week.

Gains for stocks have “been built on the potential for monetary policy support from the Federal Reserve on one side, and the easing of trade tensions on the other,” Alex Dryden, global market strategist at JPMorgan Asset Management, told Bloomberg TV. “That is not the best basis for building an equity market rally in a sustainable manner.”

After firming all week, rand slightly weaker in wake of SONA

After firming 3% against the dollar during the week, the rand was trading slightly weaker against the dollar on Friday morning in the wake of President Cyril Ramaphosa's State of the Nation address.

The local currency opened trade at R14.33 to the greenback and was changing hands at R14.38 at 08:30, down 0.3%.