Markets WRAP: Rand closes at R13.92/$

The rand closed at R13.92 to the greenback on Tuesday afternoon.

The day's range was between R13.83 to R13.93.

OVERVIEW: Treasuries slumped and the dollar rallied after solid US retail sales and factory output data added to signs the world’s largest economy is holding up. Stocks fell as traders assessed mixed results from big banks. Benchmark 10-year yields halted a two-day slide, while the greenback advanced against most major currencies.

The S&P 500 Index fell from a record high as JPMorgan Chase & Co’s disappointing lending outlook offset better-than-estimated results in Goldman Sachs Group’s trading unit. Technology shares dropped as some of the industry’s giants are headed for their biggest antitrust showdown with Congress in 20 years. Benchmark 10-year rates surge after economic data. Traders pushed down the value of bonds as the data underscored Federal Reserve Chairman Jerome Powell’s view that consumer spending and finances remain healthy amid a tight labour market that’s been supporting the expansion.

That strength may complicate the debate for policy makers as they gather July 30-31 to chart their course amid growing headwinds from slowing global growth to trade tensions.

“Retail sales have really been ebbing and flowing but it’s good to see this kind of strength especially in the current trade environment we’re in,” said Mike Loewengart, vice president of investment strategy at E*TRADE Financial.

“As we kick off earnings season, this is an important indicator of retail health and could give insight into what’s to come.”

Elsewhere, the euro slipped as investor confidence in Germany’s economic outlook fell. Despite strong UK wage numbers, the pound slumped on fresh Brexit worries. Oil traded near $60 a barrel.

These are the main moves in markets:

Stocks

The S&P 500 was little changed at 3,013 at 09:57 in New York. The Stoxx Europe 600 Index jumped 0.3%. The MSCI Asia Pacific Index dipped 0.2%.

Currencies

The Bloomberg Dollar Spot Index increased 0.3%. The euro declined 0.4% to $1.1214. The British pound sank 0.8% to $1.242. The Japanese yen dipped 0.3% to 108.24 per dollar.

Bonds

The yield on 10-year Treasuries gained four basis points to 2.13%. Germany’s 10-year yield climbed one basis point to -0.24%. Britain’s 10-year yield increased one basis point to 0.812%.

Commodities

The Bloomberg Commodity Index declined 0.4%.West Texas Intermediate crude climbed 0.1% to $59.65 a barrel. Gold dipped 0.2% to $1,410.70 an ounce. - Bloomberg

European stocks, US futures edge higher

Bloomberg  

European stocks edged higher with US futures following a mixed session in Asia as investors looked to earnings and policymakers for the rally’s next catalyst.

Treasuries drifted and the dollar strengthened.

The Stoxx Europe 600 Index climbed for a third straight session, pulled higher by health care shares.

Futures on the S&P 500 Index also nudged up after the US benchmark ended Monday at a record.

Japanese shares dipped as traders returned from a holiday while South Korean stocks advanced. The pound fell for a second day after both UK prime ministerial candidates said they would seek to remove the Irish border backstop plan from any Brexit deal with the European Union. Oil held below $60 a barrel as US output returned after storm Barry was downgraded.

EOH to approach police after probe finds evidence of theft, bribery

Stephen van Coller, the CEO of ICT group EOH, said on Tuesday that an internal probe had revealed that "about eight" people had been involved in a "suspicious transaction" totalling R1.2bn between 2014 and 2017.

Coller was giving an update on the findings on the first part of a forensic probe by law firm ENSafrica into possible fraudulent transactions involving the gro

Economists say SA Reserve Bank rate cut likely

Economists are expecting the SA Reserve Bank’s Monetary Policy Committee to this week announce a reduced repo rate for the first time since March 2018. 

The central bank's recently reappointed governor Lesetja Kganyago is set to announce the repo rate on Thursday in Pretoria at 15:00.