Markets WRAP: The rand closed at R13.86/$

The rand closed at R13.86 to the greenback on Wednesday afternoon.

The day's range was between R13.86 and R13.94.

OVERVIEW: US equity futures fell and European stocks edged lower amid weak economic data and mixed corporate results, including an unexpected quarterly loss for Boeing. Treasuries advanced along with bonds in Europe.

Futures on all three of the major underlying American indexes declined after the US opened an antitrust probe into big technology companies, while AT&T posted its first quarterly profit decline in four years and Caterpillar projected 2019 earnings at the low end of forecasts.

On the positive side, UPS exceeded its profit guidance. The Stoxx Europe 600 index fluctuated after euro-region manufacturing gauges fell short of economists’ estimates, though an earnings beat by GlaxoSmithKline lifted the mood somewhat.

A slump in iron-ore prices weighed on miners, and banks dropped after Deutsche Bank’s malaise deepened. Benchmarks rose in Tokyo and Shanghai, and fell in Seoul and Mumbai.

The dollar declined for the first time in four days ahead of Thursday’s European Central Bank meeting. Most European bonds climbed, sending yields across the continent to unprecedented lows, as the disappointing manufacturing data added to concerns about the region’s growth outlook. Crude oil advanced for a fourth session, trading around $57 a barrel in New York.

Cutting Time

Broadly positive earnings reports have buoyed stocks this so far week, though Deutsche’s woes and flagging demand reported by carmakers and other manufacturers gave investors a reminder of the uncertain outlook for the global economy. To add to that, the Justice Department opened a broad antitrust review into whether dominant technology firms are unlawfully stifling competition, hitting shares of Amazon, Facebook and Alphabet in after-hours trading.Central banks also remain in focus after the IMF on Tuesday revised its forecasts for global growth lower and the Federal Reserve is seen trimming its policy rate by a quarter percentage point next week.

The ECB may hold fire tomorrow, though its message will be closely parsed for signs of a September move as the poor economic data ramp up pressure to deliver stimulus. On the trade front, chief US negotiator Robert Lighthizer and Treasury Secretary Steven Mnuchin are set to travel to China next week for the first high-level, face-to-face meeting since talks broke down in May.

Elsewhere, Britain’s pound rebounded from a two-year low following Boris Johnson’s victory in the contest to succeed Theresa May as UK prime minister, though the nation’s equity benchmark underperformed.

These are the main moves in markets:

Stocks

The Stoxx Europe 600 Index fell less than 0.05% as of 08:22 New York time. Futures on the S&P 500 Index decreased 0.2%. The MSCI All-Country World Index gained less than 0.05%. The UK’s FTSE 100 Index dipped 0.9%, the lowest in almost four weeks on the largest decrease in eight weeks.

Currencies

The Bloomberg Dollar Spot Index fell 0.1%. The euro declined 0.1% to $1.1142, the weakest in almost eight weeks. The British pound increased 0.5% to $1.2496. The Japanese yen climbed 0.2% to 108.05 per dollar.

Bonds

The yield on 10-year Treasuries fell three basis points to 2.05%, the biggest fall in a week. Germany’s 10-year yield fell three basis points to -0.38%, reaching the lowest in almost three weeks on its sixth straight decline. Britain’s 10-year yield fell one basis point to 0.679%. Japan’s 10-year yield declined one basis point to -0.147%, reaching the lowest in almost three weeks on its eighth straight decline.

Commodities

West Texas Intermediate crude advanced 0.3% to $56.93 a barrel, the highest in more than a week. Gold advanced 0.7% to $1,427.09 an ounce. Iron ore decreased 1.8% to $111.20 per metric ton, the lowest in almost three weeks. - Bloomberg

Sanlam finance head Heinie Werth to take over as Emerging Markets CEO

Sanlam [JSE: SLM] has appointed Heinie Werth to take over as Chief Executive Officer of Sanlam Emerging Markets, the group said on Wednesday.

Werth, who has been serving as the group's financial director, will therefore assume responsibility for the Sanlam Pan Africa, the business cluster representing Sanlam across 33 countries on the African continent, as well as the group's other emerging markets business in India, Lebanon and Malaysia.

Junior Ngulube, who is the current CEO of Sanlam Pan Africa and due to retire in 18 months, will take on the role of Vice Chairman of SPA.

Wikus Olivier, currently executive head of group finance, will be interim chief financial officer, until the recruitment process begins to fill the role of group financial director.

The changes will be effective from August 1, 2019.

According to Sanlam, the executive changes support its "resolve to execute its Pan-Africa and emerging markets strategy […] for the success of the broader Group".

Sanlam Group CEO Ian Kirk said: "The geographic spread, size and complexity of the SEM cluster as well as the size of the investment we have made to acquire SAHAM Finances is unprecedented within Sanlam and possibly in the industry. I believe that the combined and complementary efforts of Heinie and Junior will assist to take the SEM Cluster, and the Sanlam Group as a whole, to an unparalleled competitive position."

At 13:19 on Wednesday, Sanlam shares were trading at R76.58, down 0.35% on the day.

SA's inflation came out at 4.5% for June, which was unchanged from May.

The rand is still hovering at R13.90 to the greenback.

The rand lost some of its appeal during late trade on Tuesday, says Treasury Partner at Peregrine Treasury Solutions.

In a note to clients, she said this was due to the IMF cutting growth forecasts for sub-Saharan Africa.

By 08:59, the rand was changing hands at R13.88 to the greenback.

"This was compounded by renewed fears surrounding Eskom and the burden the embattled SOE places on the fiscus as finance minister Tito Mboweni tabled a new bill to appropriate an additional R59bn to Eskom.  

"The UK has confirmed Boris Johnson as its new Prime Minister. With the risk largely priced in already, attention will now fall on his efforts to push through a no deal Brexit. CPI from the local economy will be released today while new home sales and services PMI is due from the US."