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Markets WRAP: Rand closes at R13.85/$

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23 Jan 2019

The rand closed at R13.85/$, with TreasuryONE senior currency dealer Andre Botha earlier noting that EM currencies had been under pressure from the IMF cutting its global growth forecast, which kept the dollar on the front foot. 

Here's what the end of Wednesday brought: 

USDZAR 13.8510

EURUSD 1.1364

EURZAR 15.7311

GBPUSD 1.3055

GBPZAR 18.0735

AUDZAR 9.8778

CADZAR 10.3670

CNYZAR 2.0376

ZARJPY 7.9327

CHFZAR 13.8816

R186 8.85%

US 10 Year 2.77%

JSE -0.47%

FTSE -0.42%

S&P 500 0.72%

Gold 1 279.88 

Plat 791.00 

Plad 1 340.00 

Rhod 2 475.00 

Irid 1 470.00 

Ruth 268.00 

Copp 5 920.25 

Brent 61.38 

Gold ZAR 17 718.79 

Plat ZAR 10 950.68 

Brought to you by TreasuryONE

23 Jan 2019

Rand gains by as much as 1.1%

Rand traders aren’t quite discounting the chance of a South African rate increase, even after inflation fell to a seven-month low.

The currency gained as much as 1.1% on Wednesday, outperforming emerging-market peers, after data showed price increases slowed to 4.5% in December, right on the mid-point of the target range.

That’s where the central bank wants to keep it, according to Governor Lesetja Kganyago - and traders apparently took note.

While risks to global economic growth are "without a doubt" a dominant concern and the domestic inflation outlook is largely "contained", it’s important to anchor inflation at the midpoint to allow flexibility to deal with price shocks, Kganyago said in an interview with Bloomberg TV in Davos.

Continue reading

23 Jan 2019

UK business sound alarm over no-deal Brexit - AFP 

A senior British Cabinet minister says businesses need to prepare for the possibility the UK will leave the European Union in March without an exit deal, as a growing number of British firms say they are stockpiling goods or shifting operations overseas.

Last week British lawmakers threw out Prime Minister Theresa May's EU divorce deal, and attempts to find a replacement are gridlocked.

International Trade Secretary Liam Fox said Wednesday that "no deal is a possibility."

Many business groups say a "no-deal" Brexit will cause economic chaos by imposing tariffs, customs checks and other barriers between the UK and the EU, its biggest trading partner.

Carolyn Fairbairn of the Confederation of British Industry says politicians must rule out a no-deal Brexit "to halt irreversible damage and restore business confidence

23 Jan 2019

The JSE All Share index was trading 0.5% weaker at 12:30 on Wednesday, while the Top 40 index was down 0.6%. 

While Financials and Industrials were down, Resources were even. 

The local currency, meanwhile, was trading 0.5% firmer against the US dollar. The rand opened at R13.97/$ and was changing hands at 13.89/$ at 12:30. 

 

23 Jan 2019

Rand holds steady on December inflation figures

The rand held steady at R13.92/$ following the release of December inflation figures, which was at 4.5% - in line with market expectations.

In an earlier interview with Bloomberg TV in Davos, Reserve Bank Governor Lesetja Kganyago said that if inflation was at the midpoint of the bank’s targeted range between 3% to 6%, this would allow flexibility to deal with shocks.

Continue reading

23 Jan 2019

Imperial announces retirement of CEO Marius Swanepoel

CEO of Imperial Logistics Marius Swanepoel will retire- with effect from February 1, 2019, the company said in a shareholder notice on Wednesday.

The company previously announced his retirement will only come into effect after June. However, the handover process was "concluded earlier" than previously anticipated.

"Marius will now retire as CEO of Imperial Logistics with effect from 1 February 2019 and Mohammed Akoojee will succeed him as CEO of Imperial Logistics from that date," the notice read.

"Marius will continue to serve as an executive director on the Imperial Logistics board until 30 June 2019 and will remain employed by Imperial Logistics until 31 December 2019, responsible for special projects and available for strategic counsel."

Swanepoel has served at Imperial for 29 years.

His successor, Akoojee is a Chartered accountant and holds a CFA qualifications. He joined the group in 2009.

"Prior to being appointed as CEO Designate of Imperial Logistics in 2018, he served as the Acting CEO of Imperial Holdings in addition to his role as group CFO.

"He previously served as CEO of the Logistics African Regions division and executive director responsible for mergers, acquisitions, strategy and investor relations for the group."

Imperial's stock, which opened at R70.25 was trading 2.67% higher at at R70.49 by 09:35.

23 Jan 2019

Stocks mixed as rally stalls; yen declines

Asian stocks traded mixed Wednesday as traders juggled continuing doubts about the prospects for progress on trade with signs of China stimulus and moves to end the US government shutdown.

The yen slid as the Bank of Japan cut its inflation outlook.Shares slipped in Japan, rose in Korea and fluctuated in Hong Kong and China.

US futures posted modest gains following Tuesday’s decline in all major benchmarks led by a slide in technology shares. European contracts showed small losses. White House adviser Lawrence Kudlow said that negotiations scheduled for next week will be "very, very important" and "determinative."

Meantime, the Senate scheduled a vote for Thursday on Democratic-backed legislation to reopen the government, the first sign of a possible way out of the shutdown.

China’s central bank pumped liquidity into the banking system through a new tool.

MORE HERE

23 Jan 2019

Kganyago: Anchoring inflation at 4.5% will allow flexibility to deal with shocks

The SA Reserve Bank is seeking to anchor inflation at the midpoint of its target range of 3% to 6% to allow flexibility to deal with price shocks, Governor Lesetja Kganyago said.

While risks to global economic growth are "without a doubt" a dominant concern and the domestic inflation outlook is largely "contained," it’s important to bring inflation expectations closer to 4.5%, he said in an interview with Bloomberg TV in Davos.

The Reserve Bank kept its benchmark rate at 6.75% last week after raising it by 25 basis points in November, the first increase in more than two years.

It slashed forecasts for inflation on new assumptions for the oil price, but flagged risks from currency and commodity-price volatility.

Continue reading

23 Jan 2019

World Bank raises SA’s economic growth rate

In its latest report, the World Bank forecast South Africa’s economic growth will accelerate to 1.3% this year up from an estimated 0.9% in 2018, citing the implementation of structural reforms announced last year - analysts from NKC Economics noted.

It also projects that South Africa’s economic growth at 1.7% in 2020.

Meanwhile, the IMF’s Managing Director Christine Lagarde said the Fund has modestly cut its global growth forecast for 2019 to 3.5% (previously 3.7%) while speaking at the World Economic Forum in Davos, Switzerland.

World Bank says Eskom simply too big to fail

23 Jan 2019

Emerging market currencies under pressure - NKC Economics

The rand weakened amid volatile trade on Tuesday.

The South African currency ended little changed after recovering earlier losses.

Emerging market currencies were under pressure throughout the day after the IMF trimmed its global growth forecasts earlier this week.

This prompted risk-averse investors to opt for the safety of the greenback.

At close of local trade, ZAR quoted 0.1% weaker at R13.89/$, after trading in range of R13.83/$ - R13.94/$. ZAR traded flat overnight. Expected range today R13.80/$ - R14.00/$.

23 Jan 2019

Asian markets swing as dealers battle uncertainty

Asian markets fluctuated Wednesday following a negative lead from Wall Street as investors grow nervous about the chances of success in China-US trade talks ahead of a crunch meeting next week.  

The mood remains cautious, with the rally that has characterised the start of the year stuttering owing to a slowing Chinese economy, a softer global outlook and other issues including Brexit and the US government shutdown, which shows no sign of ending soon.

US investors turned sellers on Tuesday after the Financial Times and CNBC said Washington had rejected Beijing's offer of preparatory discussions ahead of the next round of high-level negotiations.

And while the White House denied the reports, observers said they highlighted the fragility of the talks.

They also came a day after Bloomberg News said the two sides were struggling to reach agreement on the crucial matter of intellectual property, a key source of US anger. Hopes that China and the US were on the right track have helped rally global markets in January, having suffered a torrid 2018.

MORE HERE

23 Jan 2019

RECAP: Global equity stocks closed weaker on Tuesday

Global equity stocks closed Tuesday’s trading session weaker as investors continued to digest the IMF’s downwardly revised growth outlook and reports that Trump won’t soften his stance on intellectual property issues when trade talks with China resume at the end of January, economist Mpho Tsebe of RMB Global markets research said in a market update.

"If the two nations fail to reach a deal by 1 March, the trade truce deadline, the US has threatened to impose tariffs on another US$200bn worth of Chinese goods," she explained.

"The S&P and Nasdaq closed Tuesday’s trading session 1.4% and 1.9% lower, while emerging market stocks, the Nikkei and JSE ALSI declined 0.8%, 0.5% and 0.1%.

"The rand lost 1.1% against the US dollar to close at 13.97 against the US dollar. The movements in the rand were also in line with losses in other emerging market currencies, with the Brazilian real and Turkish lira depreciating by 1.2% and 0.4% against the greenback," Tsebe said.

As for inflation – RMB expects headline inflation to have eased to 4.5% in December, from 5.2% reported in November.

"The moderation in headline CPI is attributed to the R1.84/litre or 10.9% m/m decrease in the price of 93 octane unleaded petrol. Core inflation is likely to have remained steady at 4.4% y/y (0.2% m/m)."

23 Jan 2019

Rand edges closer to R14/$

The rand started the day at R13.97/$, Bianca Botes, Corporate treasury manager at Peregrine Treasury Solutions warned it could breach the R14/$ mark if current risk aversion in markets persist.

"Donald Trump has also made it clear that he will not back down on his hard stance towards China merely to reach a trade agreement, once again reigniting concerns surrounding the trade war," she explained.

Consumer inflation figures are expected to be released today and would provide an indication of the possible next interest rate decision by the Reserve Bank's Monetary Policy Committee.

A tight range of trade between R13.86 an R13.98 to the greenback is expected.

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Rand - Dollar
19.02
-0.6%
Rand - Pound
23.97
-0.3%
Rand - Euro
20.53
-0.3%
Rand - Aus dollar
12.35
-0.0%
Rand - Yen
0.13
-0.6%
Platinum
894.10
-0.3%
Palladium
996.00
-0.6%
Gold
2,196.05
+0.1%
Silver
24.45
-0.8%
Brent Crude
86.09
-0.2%
Top 40
67,848
+0.3%
All Share
74,067
+0.2%
Resource 10
56,251
+1.1%
Industrial 25
103,518
+0.2%
Financial 15
16,466
-0.4%
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