Markets WRAP: Rand closes at R13.94/$
US non farm payroll come in at 155 000 jobs, which is weaker than the expected 205 000, says TreasuryONE. Unemployment stays unchanged.
"The rand likes the headline number and is currently trading at R14.09 after testing R14.18 before the release of the number." By 15:45, the rand was changing hands at R14.09.
Cryptocurrencies continued their slide with a fresh bout of losses Friday after the SEC dashed hopes that a Bitcoin exchange-traded fund would appear before the end of this year. Bitcoin, the largest digital token, slumped as much as 8.2%, taking it down past $3 400 to the lowest level since September 2017, according to consolidated pricing compiled by Bloomberg.
Smaller rivals including Ether, Litecoin and XRP were hit even harder. The Bloomberg Galaxy Crypto Index sank 8.4%. The Securities and Exchange Commission plans to decide by February 27 whether to approve a proposed ETF from financial-technology company SolidX Partners and asset manager Van Eck Associates, the agency said December 6.
The proposal was set to get a decision from the SEC in December after previous delays and the new timeline is a fresh blow to an industry that’s seen prices fall throughout 2018. A key impediment has been a lack of mainstream institutional adoption, alongside continuing security and regulatory concerns.
“Sentiment in the market is really bad, any negative news has an exponential effect,” said Timothy Tam, co-founder and CEO of CoinFi, a cryptocurrency research firm. With the latest rout, Bitcoin has now fallen more than 80% from its all-time high a year ago and is trading about 50% below its 200-day moving average, the most since January 2015, according to Bloomberg calculations. Cryptocurrencies have erased almost $730 billion in value from a peak in January, according to data from CoinMarketCap.com. - Bloomberg
Andre Botha, Senior Dealer at TreasuryONE said in a morning note to clients, “The expected fall out between the US and China over the arrest of the Huawei CFO and its possible impact on the trade truce is hanging over the market. The major currencies are holding steady against the dollar, but EM currencies fell yesterday.
"It seems that the trade wars and impact of it will still be with us for the foreseeable future. The rand was particularly hard hit and nearly hit R14.20 yesterday afternoon. The currency has recovered somewhat this morning and is currently at R14.04. By 10:53, the rand was trading at R14.05/$.
"Rating agency Fitch kept South Africa at junk investment status with a stable outlook in their review yesterday. The same narrative continues to dominate the rating agencies press releases and with weak growth and high levels of Government debt. US stocks closed almost flat after initially falling sharply and Asian stocks are modestly higher this morning.
"US Treasury yields fell further to 2.88% and 3.14% for the 10 and 30-year bonds respectively. Gold is steady at $1239.65 while oil has slipped to $59.50. Today the markets await the US non-farm payroll numbers and with the ADP number disappointing yesterday ... it could mean a bit of rand strength but the momentum at the moment is for the rand to keep drifting higher."
Asian investors battled to finish a volatile week with some stability on Friday as they weigh the outlook for China-US trade talks and uncertainty in oil markets, while looking ahead to the release of key US jobs data.
After the furious selling of the past two days, there was some optimism after a report said the Federal Reserve could slow down its pace of interest rate hikes next year, providing some much-needed relief to under-pressure dealers.
The general mood across trading floors is of unease, just days after the euphoria of Donald Trump's G20 tariffs ceasefire deal with China's Xi Jinping that put the row off for 90 days while they try to resolve the crisis.Asian markets tentatively higher at end of volatile week