Markets WRAP: Rand closes at R15.37/$ on Wednesday

The JSE and the rand were both steady at 13:15 on Wednesday. 

The local currency was trading at R15.36/$ after opening at R15.31 to the greenback, while the JSE was 0.13% higher, with financials and resource stocks up, and industrials weaker. 

Earlier in the day news broke that UK Prime Minister Boris Johnson plans to suspend Parliament, increasing the risk of a no-deal Brexit for the UK, one of SA's largest trading partners. 

As Bloomberg reported: 

Prime Minister Boris Johnson said he plans to suspend Parliament for almost five weeks ahead of Brexit, setting up a showdown with lawmakers who want to block him from taking the UK out of the European Union without a divorce deal. 

Pound falls as Johnson seeks Parliament suspension before Brexit

Charlotte Ryan and Anooja Debnath, Bloomberg

The pound slid as Prime Minister Boris Johnson sought to suspend the UK’s Parliament, raising the risk of a no-deal Brexit.

Sterling was the worst performer among major currencies as Johnson confirmed an earlier BBC report, while UK government bonds rallied on expectations of an earlier Bank of England interest-rate cut.

With the UK set to leave the European Union on October 31, suspending Parliament would mean less time for lawmakers to attempt to block a no-deal.

A no-deal Brexit is the worst-case scenario for the pound, driving it down to $1.10, according to a recent Bloomberg survey. The UK currency erased Tuesday’s gains that came thanks to the positive tone struck by European leaders at the Group-of-Seven meeting and efforts by the opposition Labour party to attempt to block no-deal.

“It just underscores the veil of uncertainty the pound is facing, the still non-negligible risk of no-deal Brexit and the vulnerability of the currency to negative headline news,” said Petr Krpata, a currency strategist at ING Groep NV.

The pound fell as much as 1.1%, the most in a month, before paring the drop to be 0.7% lower at $1.2206. 

US futures mixed, Asian stocks drift as trade feud eases

Bloomberg 

US futures rose and stocks in Asia were mixed Wednesday as investors assessed the latest in the unpredictable path of trade talks between the US and China.

Treasuries steadied after gains. Benchmarks nudged higher in Sydney and Seoul, were little changed in Hong Kong and Tokyo, and slipped in China. European futures were flat.

The 10-year Treasury yield stayed below 1.50% near a three-year low and the dollar was steady against major currencies. The yen dipped and the yuan stabilised.

Earlier, US shares closed lower in New York Tuesday in a seesaw session as it appeared that China was bracing for the worst on tariff negotiations with President Donald Trump’s credibility becoming a key impediment to a deal.

Trump’s flip-flops on trade have left investors second-guessing the next moves as optimism of a resolution become more remote. The US president’s apparent de-escalation of trade tensions at the Group-of-Seven meetings had helped ease investor nerves somewhat before Beijing questioned some of those comments.

The latest round of tariffs from both sides are due to be staggered from Sept. 1.

“Hope gave way to pragmatic realism about the outlook for the China-US trade dispute,” Greg McKenna, strategist at McKenna Macro, wrote in a note Wednesday. “The market is still trying to get a feel for where it’s at and what it thinks as we get closer to the deadline for the tariffs this week.”

Elsewhere, crude extended gains on expectations of shrinking U.S. inventories. The euro stabilized after coming under pressure following data showing Germany was on the brink of a recession. The pound held gains as opposition politicians stepped up efforts to prevent a no-deal Brexit.

Mboweni's new plan to boost growth and create a million jobs

Minister of Finance Tito Mboweni has called for a series of "deliberate and concerted actions" to raise SA's moribund GDP growth rate by up to 3% per year in a new 77-page page economic policy paper. 

The document Economic Transformation, Inclusive Growth and Competitiveness: Towards an Economic Strategy for South Africa was published on National Treasury's website on Tuesday evening with little fanfare.

The finance minister has asked the public to submit comments by September 15.

"This paper is a detailed examination of the structural reforms that can reverse the downward trend in South Africa’s growth potential and competitiveness," said Treasury in an accompanying statement.