Markets WRAP: Rand closes at R14.14/$

The rand closed at R14.14 to the greenback on Thursday afternoon.

The day's range was between R14.13 and R14.26.

The final revised annualised US first-quarter GDP number came out in line with expectations at 3.1%, TreasuryONE said in a note to clients.

"The rand is having a stellar day, in the meantime, and is currently trading at R14.1400 as EM currencies are on the front foot." 

Oil retreats from five-week high as Trump damps trade optimism

Rakteem Katakey and Sharon Cho, Bloomberg

Oil retreated from a five-week high in New York after US President Donald Trump warned he might impose substantial additional tariffs on Chinese imports.

Futures fell as much as 1.1% after closing 2.7% higher on Wednesday as government data showed US crude stockpiles dropped the most since September 2016.

Trump said in an interview with Fox Business Network that there would be more levies on Chinese goods if there’s no progress at his meeting with President Xi Jinping on the sidelines of the G-20 summit on Saturday.

Oil jumped more than 10% in the five sessions through Wednesday as tensions in the Persian Gulf intensified, causing concerns over supply. Trump’s latest tariff threat on China is reminding investors that an already fragile demand outlook could worsen if the world’s two biggest economies don’t return to negotiations.

These are pulling the Organization of Petroleum Exporting Countries and its allies in different directions as they prepare to meet in Vienna to decide on production levels.

“The uncertainty ahead of this weekend’s G-20 and next week’s OPEC meetings are likely to keep the upside capped for now,” said Ole Sloth Hansen, head of commodity strategy at Saxo Bank A/S in Copenhagen. “Failure at the weekend would see the market focus return to global growth and demand worries.”

S&P lowers Cell C's debt 

S&P announced on Thursday that it had again downgraded Cell C's debt.  

"The downgrade follows Cell C's amendment of the payment schedule of the private and unrated South African R1.4bn Airtime Facility agreement, delaying selected repayments," the rating agency said in an update. 

"Although no conventional payment or legal default event under the amended agreement has occurred to date, we view the repayment profile restructuring as a distressed exchange and tantamount to selective default, given Cell C's weak liquidity position.

"We are therefore lowering our rating on Cell C to 'SD' (selective default) from 'CCC-' and our issue rating on the company's senior secured debt to 'CC' from 'CCC'. The '2' recovery rating reflects our estimate of substantial (70%-90%, rounded estimate: 85%) recovery to creditors in the event of a payment default."

Asian stocks advance with focus on G-20

Adam Haigh

American and European stock futures advanced along with Asian shares on optimism that the US and China will declare another truce in their trade war at a presidential meeting on Saturday.

The yen extended losses after the biggest drop since April. Equity benchmarks in Tokyo and Hong Kong saw gains of more than 1%, and stocks also climbed from Seoul to Shanghai after reports that the current plan is for the US to hold fire on hiking tariffs on another swathe of Chinese imports.

Ten-year Treasury yields edged up after rising on Wednesday, while crude oil gave up a slice of its recent jump. Gold prices remain lower after giving up some of its surge since mid-June. The yuan edged up offshore.

The Saturday sit-down between Presidents Donald Trump and Xi Jinping in Osaka, Japan, looms as a pivotal event for markets, with the reports about a tariff pause contrasting with Trump’s own indications that more hikes in duties are possible.

Meantime, traders are assessing the prospect for the Federal Reserve to cushion the outlook with interest-rate cuts, though prominent dove James Bullard raised doubts about a half-point reduction.

“We should not expect too much from the Osaka meeting,” Christian Nolting, global chief investment officer at Deutsche Bank Wealth Management told Bloomberg TV. “To be overly optimistic could be on the wrong side for this weekend.”

Elsewhere, Bitcoin traded close to $13 000 after gaining about 50% this month.