Markets WRAP: Rand ends the day at R13.76/$

The rand ended the day at R13.76/$

The rand, which opened at R13.66 to the greenback closed almost a percent weaker at R13.76/$.

In a market update released on Friday morning, RMB head of research Nema Ramkhelawan-Bhana noted that the local unit reached a four month high at R13.66/$.

"Its performance, though admirable, is only second to the Turkish lira, which has recouped 6.5% in value against the US dollar since 1 November," she added.

Market indicators from TreasuryONE:

USDZAR 13.7639

EURUSD 1.1341

EURZAR 15.6018

GBPUSD 1.2742

GBPZAR 17.5305

AUDZAR 10.0357

CADZAR 10.3289

CNYZAR 1.9765

ZARJPY 8.2473

CHFZAR 13.7680

R186 8.94%

US 10 Year 3.01%

JSE -1.57%

FTSE -0.61%

S&P 500 -0.04%

Gold 1 217.70

Plat 802.90 

Plad 1 180.49 

Rhod 2 590.00 

Irid 1 470.00 

Ruth 268.00 

Copp 6 237.50 

Brent 58.34 

Gold ZAR 16 751.90 

Plat ZAR 10 978.09 

Euro-area inflation eases as ECB approaches end of bond buying

Euro-area inflation eased off a six-year high just as the European Central Bank is set to pare back monetary stimulus and issue new macroeconomic forecasts.Consumer prices rose 2% in November from a year earlier, down from 2.2% in October.

A measure that strips out volatile components slipped to 1%, Eurostat said on Friday.Although inflation has held near the ECB’s target of a little less than 2% for six months, that’s mostly the work of high energy costs.

Still, President Mario Draghi and his peers have stuck to their plans to cap quantitative easing at €2.6trn ($3trn) at the end of the year.

Rand weaker, still at three-month high against dollar 

After strengthening to within touching distance of R13.60/$ on Thursday afternoon, the rand retreated again slightly on Friday. 

Andre Botha, senior currency dealer at TreasuryONE, said the rand's performance on Thursday afternoon came on the back of the dollar slipping against all major currencies due to dovish comments by US Federal Reserve chair Jerome Powell.

"This has placed the rand in a good position as we head into the weekend," said Botha. The local curreny opened the day at 13.66/$ and was trading at 13.72 to the greenback at 12:30. 

Oil prices gain as investors eye Fed relief on interest rates

Oil prices gained on Thursday after the US benchmark slid below $50 a barrel following reports Russia could join a production cut at next month's OPEC meeting.

The gains in petroleum prices came on a mixed day for global stocks as traders worldwide weighed Federal Reserve comments that were widely seen as dovish on monetary policy.Robust petroleum supply and a weakening global economic outlook have weighed on oil prices since early October, pushing US benchmark West Texas Intermediate below $50 a barrel for the first time in more than a year.

But oil prices reversed following reports that Russia could join Saudi Arabia and other producers in cutting output at a December 6 Vienna meeting to defend prices.

Rand somewhat weaker after Thursday's big gains 

“The rand had a fantastic day  as the local unit pressed to within touching distance of R13.60. This was all on the back of the US dollar slipping against all major currencies due to the dovish comments by Fed Chairman Powell and further dovish Fed minutes that were released last night.

This has placed the rand in a good position as we head into the weekend.Looking at today, we have a light data day with the only relevant number out today our trade number that will be released later this afternoon. We only expect a spike in the Rand should the number disappoint massively to the downside. However, the rand could have some volatility next week as the details of the G-20 summit gets released and whether President Trump relaxes his stance on tariffs with China."

Economists, Wall Street split on Fed signals 

Economists and investors have been scratching their heads this week over signals from the Federal Reserve, which left the future of US monetary policy open to broadly divergent interpretations.In remarks delivered on Wednesday in New York, Fed chairman Jerome Powell uttered words that set Wall Street on fire.

Claiming that benchmark lending rates were "just below" a range of estimates for "neutral," that is, neither stimulating nor slowing growth, Powell sent a signal that markets took to mean the Fed might ease off on raising rates in 2019.

Tokyo stocks open flat as investors await US-China summit

Tokyo stocks opened flat on Friday as investors took wait-and-see attitudes ahead of a US-China summit during the G20 this weekend.The benchmark Nikkei 225 index was down just 0.01% or 2.19 points at 22 260.41 in early trade, while the broader Topix index was up 0.08% or 1.38 points at 1 660.85.

"As investors step aside to wait for the US-China summit, today's focus will be whether the Nikkei index can rebound" to around 22 300, Toshiyuki Kanayama, senior market analyst at Monex, said in a commentary.

Japan's factory output in October was up 2.9% from the previous month, after a 0.4% dip in September, official data showed before the opening bell, but it had little impact on stocks or currency markets.