Rand strengthens thanks to a weak lira
CAPE TOWN – The rand edged stronger versus the US dollar during European trade on Monday.
The South African currency initially traded on the back foot as renewed Turkey lira weakness and softer Chinese industrial profits data for July hit emerging market sentiment, however, the rand reversed these losses in late European trade as market participants started betting that the pace of US monetary policy tightening would be slower than expected, following US Federal Reserve chairperson Jerome Powell’s speech on Friday, which supported South African bond prices.
At close of local trade, the rand was quoted 1 percent stronger at R14.12 a dollar, after trading in range of R14.11 a dollar to R14.35 a dollar. The rand traded slightly weaker overnight. Expected range today R14.10 to R14.40 a dollar.
Government bond prices inch higher
Domestic debt prices traded firmer aligning with a stronger local currency. In emerging capital markets news, the JP Morgan EMBI Global Diversified Index traded marginally higher. At close of local trade, R186 was marked-to-market at 8.870 percent, 3 basis points lower.
Local bourse firmer across the board
The JSE all share (+1.5 percent) ended higher on Monday , buoyed by gains in large mining (+2.3 percent) and retail (+1.3 percent) shares. In the overall emerging market sphere, the MSCI Emerging Market Index (1.8 percent) traded higher. In local news, Super Group (+6.9 percent) shares soared after the transport and logistics group reported a 15 percent rise in full-year headline earnings a share to R3.32, during the year ended 30 June 2018.
Crude gains capped by trade concerns
The Brent oil price eased on Monday after surging last week, as uncertainty over a global trade war kept gains to a minimum. At close of local trade, the Brent oil price quoted 0.2 percent higher at $76.01 a barrel. Crude prices traded slightly higher during Asian trade this morning.
Bullion clings to previous-session gains
The yellow metal’s price strengthened on Monday as the precious metal continued to hover above the $1 200 mark, following a weaker greenback. At close of local trade, bullion quoted 0.4 percent higher at $1 211.07 an ounce. The gold price ticked a tad higher overnight.
– NKC Research