Markets WRAP: Rand closes at R15.27/$

The ZAR has seen range bound trading but not without volatility, as a choppy trading session within a 20c range draws to close, commented TreasuryONE. The ZAR tested the 15.20 mark twice but adverse risk sentiment and trade war headlines continues to keep the ZAR for firming further, added senior currency dealer Andre Botha.

Here's how Thursday wrapped up. 

USDZAR 15.2741

EURUSD 1.1110

EURZAR 16.9587

GBPUSD 1.2108

GBPZAR 18.4834

AUDZAR 10.3432

CADZAR 11.4492

CNYZAR 2.1700

ZARJPY 6.9440

CHFZAR 15.6403

R186 8.44%

US 10 Year 1.55%

JSE -0.49%

FTSE -1.05%

S&P 500 0.40%

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OVERVIEW: European stocks declined alongside US equity futures as China pledged to take countermeasures against planned American tariffs. Treasuries and core European bonds advanced. The Stoxx Europe 600 index fell for a second day and the three main US index contracts erased gains after China said the next round of tariffs threatened by the White House violates accords already reached by Presidents Donald Trump and Xi Jinping.

Stocks had earlier climbed in Hong Kong and Shanghai, though overall they declined across Asia a day after the S&P 500 Index tumbled 2.9%. The onshore yuan edged lower as China’s central bank added liquidity to the financial system. Gold reversed an earlier decline and ticked higher. A benchmark for stocks around the world has fallen below key technical support.

Traders will be on alert for a response from Trump as they await clarity from his comments linking Hong Kong turmoil to trade talks. They’re also on the lookout for data on US retail sales and manufacturing, as well as Walmart and Alibaba earnings.

“The bond market rally is as much a global story as a US one, and yesterday it was weak data in Asia and Europe that dragged US yields down,” Kit Juckes, a strategist at Societe Generale SA, wrote in a note. “But at some point, US data need to justify the fall in US yields, or at least a bigger part of them than recent data have. So today’s numbers ought to matter.”

Elsewhere, the Australian dollar jumped after a stronger-than-expected jobs report prompted traders to trim bets of another impending interest-rate cut. Oil extended a decline as a surprise gain in US crude stockpiles added to deepening concerns over the outlook for global demand.

The yen erased a drop. Here are the main moves in markets:

Stocks

Futures on the S&P 500 Index declined 0.1% as of 10:59 London time.The Stoxx Europe 600 Index fell 0.7%. The UK’s FTSE 100 Index sank 1%. Germany’s DAX Index dipped 0.9%. The MSCI Asia Pacific Index decreased 0.7%.

Currencies

The Bloomberg Dollar Spot Index fell 0.1%.The euro advanced 0.1% to $1.115. The British pound increased 0.3% to $1.2099. The Japanese yen was little changed at 105.91 per dollar.

Bonds

The yield on 10-year Treasuries decreased two basis points to 1.56%. The yield on two-year Treasuries dipped four basis points to 1.54%. Britain’s 10-year yield declined one basis point to 0.436%. Germany’s 10-year yield fell two basis points to -0.67%.

Commodities

West Texas Intermediate crude decreased 1.5% to $54.42 a barrel. Gold gained 0.2% to $1,518.97 an ounce. - Bloomberg

China called planned US tariffs on an additional $300 billion of Chinese goods a violation of accords reached by Presidents Donald Trump and Xi Jinping, signaling its intention to impose retaliatory measures.

The short Thursday statement from the State Council Tariff Committee did not say what measures would be imposed. This story will be updated as and when more information is available. - Bloomberg

The local unit is struggling to catch a break, says Peregrine Treasury Solutions's Bianca Botes.

By 07:51, the rand was trading at R15.35 to the greenback.

This as weak Chinese data, which indicated the lowest industrial production in 17 years, stoked fears of a global recession in markets, she said.

"At the same time, the US treasury yield curve inverted for the first time since 2007. 

"Today will see the release of both UK and US retail sales as well as US nonfarm payroll numbers and industrial production. The rand has eliminated most of its previous gains, starting today at R15.40/$, R17.15/€ and R18.55/£.

"A break above R15.50 will signal a new bout of weakness while a range of R15.25 to R15.48 is on the cards for the day."