Markets WRAP: Rand breaks below the R14/$ mark

Rand breaks below the R14/$ mark

Shortly after South African markets closed on Friday, the rand gained more than 2%, trading at R13.97/$ by 17:30.

The currency had opened at R14.29 to the greenback. 

Analysts have noted the rand's volatility over the first few days of the year and have said it is a signal of what is to come.

Choppy trade for rand in first days of 2019 - analyst

The rand continued its choppy trade into 2019, moving towards the R14/$ mark and weakening as much as R14.69 to the greenback in just the first week of the year, an analyst noted.

In a market report published on Friday afternoon, Investec Chief Economist Annabel Bishop, highlighted the local currency's movements over the first few trade sessions of the year.

The rand which opened at R14.29/$ on Friday morning, had firmed as much as 1% against the dollar to R14.16/$ - its best level since mid-December, Fin24 reported.

The day's trade ranged from R14.09/$ to R14.35/$.

UK economy under pressure as Brexit deadline approaches

The first week of the new year brought a slew of bleak reports for the UK economy, highlighting the scale of the challenges to come as Britain prepares to leave the European Union.

Data Friday showed the housing market had its worst 12 months since 2013 last year, consumers remained reticent about borrowing and a gauge of services, the largest part of the economy, stayed sluggish. The latter report, combined with measures of construction and manufacturing, indicates growth may have slowed to 0.1% in the final quarter of last year, according to IHS Markit.

“The economy effectively has ground to a halt, primarily due to mounting concerns about Brexit,” said Samuel Tombs, an economist at Pantheon Macroeconomics.

“Recent indicators point to softness in retail spending. What’s more, the official data have begun to mirror the weakness of the PMIs.” He predicts growth slowed to just 0.2% in the fourth quarter.

US payrolls rise, wages top estimates in jobs blowout

US employers added the most workers in 10 months as wage gains accelerated and labor-force participation jumped, reflecting a robust job market that nevertheless faces mounting risks in 2019.

Nonfarm payrolls increased by 312 000 in December, easily topping all forecasts, after an upwardly revised 176 000 gain the prior month, a Labour Department report showed Friday.

Average hourly earnings rose 3.2% from a year earlier, more than projected and matching the fastest pace since 2009. Meanwhile, the jobless rate rose from a five-decade low to 3.9%, reflecting more people actively seeking work.

The hiring and wage gains will support consumer spending and offer some respite after a spate of weak economic data and cuts in corporate revenue forecasts fueled stock-market jitters. Still, it may be hard to replicate such labour-market strength in 2019 amid the US-China tariff war, softening manufacturing, a housing slowdown and a projected cooling in global growth.

Global stocks rally before trade talks, safe havens slip

Stocks climbed across Europe and Asia and US equity futures pointed to a stronger open as the world’s two largest economies scheduled fresh trade negotiations next week. Havens slipped, with Treasuries falling and the yen weakening after Thursday’s surge.

Concern over China-US trade tensions that have helped whipsaw stocks this week appeared to ease on news that vice ministers from the two countries are preparing to hold talks starting Monday.

The Stoxx Europe 600 Index shook off two days of losses as every sector advanced, while most Asian markets ended higher. Stocks in Japan were the exception, as traders there returned from a holiday.

Efforts to end a partial government shutdown in America also aided sentiment, and S&P 500 Index futures recouped some losses from a day earlier when the underlying gauge plunged 2.5%

Asian markets rebound after earlier losses - AFP 

Most Asian markets rose Friday, reversing early losses, though Tokyo tanked more than two percent while technology firms were hit further by Apple's shock revenue warning.

The broad gains helped end a torrid week on a positive note but traders remain on edge as they face a confluence of issues including the China-US trade war, China's stuttering economy, the US government shutdown and Brexit.

Apple has been a major source of angst this week - along with weak Chinese data - after it slashed its revenue forecasts blaming weak Chinese demand for its iPhones and citing the tariffs spat between Washington and Beijing.

The US tech titan plunged 10% Wednesday -- wiping $75bn off its value - in response to the announcement and analysts said the fact such a usually safe firm was feeling the pinch was a sign of deeper problems in the global economy.

Technology firms, particularly those linked to Apple, were among the worst hit in Asia Friday. In Tokyo supplier Kyocera fell 1.8%, Japan Display was 2.8% off and Sharp dived 4.3%, while Alps Alpine shed 6.2%. Sony was 2.7% lower.

There were also losses for AAC Technologies in Hong Kong and Foxconn in Taipei, which had already been badly hit Thursday.

"Belief in global corporate earnings is fading against the backdrop of the US-China trade friction," Nobuhiko Kuramochi, head of investment information at Mizuho Securities in Tokyo, told Bloomberg News."Deteriorating Apple earnings will lead to volume cuts for suppliers... while it could also mean cost-cutting pressures."

Tokyo's Nikkei 225 index, which was returning from a four-day break, ended 2.3% down, while Sydney shed 0.3% and Taipei lost more than 1%. However, Shanghai and Hong Kong each finished more than two percent higher.

Rand firms in early trade

The rand extended gains against the dollar on Friday morning, firming by almost 1%. 

On Thursday the local currency reversed earlier losses to the end the day over 1% stronger against the greenback as the dollar weakened.

The rand opened Friday at 14.29/$ and was trading at 14.16/$ at 10:17. This is its best level since mid-December 2018. 

Asia markets fall again as Tokyo gets 2019 off to nightmare start

There was no respite for Asian investors Friday as most regional markets suffered more losses, with Tokyo tanking 3% and technology firms taking another hiding after Apple's shock revenue warning.

The new year has proved so far to be anything but happy on trading floors as dealers face a confluence of issues including the China-US trade war, China's stuttering economy, the US government shutdown and Brexit.

Apple has been the source of angst this week after it slashed its revenue forecasts blaming weak Chinese demand for its iPhones and citing the tariffs spat between Washington and Beijing.

The US tech titan plunged 10% Wednesday - wiping $75 billion off its value - in response to the announcement and analysts said the fact such a usually safe firm was feeling the pinch was a sign of deeper problems in the global economy.

Tokyo's Nikkei falls over 3% in opening trade

Tokyo's key Nikkei index plunged more than 3% in opening trade Friday, hit by a surge in the yen and sell-offs on Wall Street amid worries over the US economy.

In its first trading session of 2019, the benchmark Nikkei 225 lost 3.32%, or 665.37 points, to 19 349.40 as it was catching up with other markets after the New Year's break. The broader Topix index lost 2.93%, or 43.72 points, to 1 450.37.