Markets WRAP: Rand closes the day at R13.91 / $

OVERVIEW: US stocks failed to increase the largest gain in more than two weeks, while trade tensions with China turned on and investors rated comments from a Federal Reserve official. Treasuries have decreased.

The technology shares led to a decline in the S & P 500 after President Donald Trump threatened China with more fares before a sit-down with its counterpart Xi Jinping.

Apple fell deeper into the bear market as Trump suggested withdrawals on mobile phones. The yield on the ten-year Treasury rose while Fed Chairman Richard Clarida supported a gradual rise in rates.

The dollar is advanced. United Technologies has plummeted more than 5% after announcing it wants to join three separate companies. Salesforce.com has exceeded its earnings report. In Europe, commodity producers have reduced stock indices, while bonds have increased. The pound weakened as traders brooded the prospect of parliamentary approval of the Brexit agreement, which according to Trump could jeopardize Britain's ability to reach a trade pact with US Western Texas crude.

Trade remains firmly in the minds of investors before the leaders of the two major economies meet in Buenos Aires at the end of the week. Trump said in an interview with the Wall Street Journal that Monday, in addition to a planned rise in customs tariffs for $ 200 billion of Chinese imports in January, he also slapped new duties on the remaining imports that have so far escaped his withdrawals, depending on how the negotiations proceed. This could weigh on optimism for US equities, which rose on Monday amid hopes that a strong start to the Christmas holidays will keep growth on track.

Fed speakers will be closely watched for the latest reflection on the trajectory of interest rates. The speech by President Jerome Powell on Wednesday will be analyzed for possible suggestions on the prospects of a pause in rate hikes next year after economic operators have reduced expectations for the pace of tightening monetary policy. Elsewhere, the shares of emerging markets have increased. Bitcoin has stabilized below $ 3,700 after losing 14% on Monday.

Hussein Sayed, FXTM chief market strategist said in a statement to customers: "The South African rand is seeing a certain stability against the dollar … despite the renewed US-China trade concerns that weigh on market sentiment.

"The optimism about the nation recovering from a technical recession could increase if business confidence in the last quarter of 2018 meets or exceeds expectations. By taking a look at the technical picture, the USDZAR remains in a downward trend on the daily charts with a price trend marginally lower than 13.86 At the time of drawing up a technical report and a daily closing below 13.80, a path could be opened towards 13.73 shortly term. "Yesterday's rally in US stocks showed that the mood has moved since last week's selloff. All three major indices rebounded strongly driven by the Tech, Retail and Financial sectors. The Dow Jones Industrial Average closed up almost 354 points, while the S & P 500 and the Nasdaq Composite gained 1.55% and 2.06%, respectively. "Optimism during a busy sales season and a slight recovery in oil prices helped to strengthen the oversold market, but President Trump's comments to the Wall Street Journal say he is still likely to raise the $ 200 tariffs billions of Chinese goods and slap rates the remaining $ 267 billion of imports likely will further complicate the markets. "The global economy desperately needs to end the ongoing trade dispute between the two largest economies. We have already seen many signs of economic slowdown in emerging markets, in Europe and even in the United States. Investors may be more concerned that the G20 summit in Argentina, which will start on Friday, does not lead to a truce or framework agreement. between China and the United States, but since we live in a world of Trump, there is always a possibility of last minute changes. Until then, expect the markets to remain uncertain. "Investors will focus on this week's Fed talks with Fed vice president Richard Clarida, who is scheduled to take action tomorrow, followed by Fed chairman Jerome Powell, who has changed significantly since a couple of months ago. their peak that suggests inflation could slow down, equity markets have entered corrective territory by hitting wealth and dark clouds are building up on the US housing market – I think the Fed now has enough reason to adjust the pace of restrictive politics , but investors need confirmation from politicians ". Yesterday's 3% recovery in oil prices seemed to be short-lived, with both major benchmarks declining today. It will be hard to know where the next prices will go unless we know the outcome of the G20 summit and the OPEC annual meeting on 6 December. Finding a new normal will probably be a difficult task in the coming weeks. In the world of cryptocurrency, traders are no longer worried about price movements as much as the fate of these currencies. A drop from almost $ 20,000 to less than $ 4000 in the price of Bitcoin is a complete crash. Some may say that we saw a similar correction earlier when prices fell from $ 1,150 in December 2013 to less than $ 300 more than a year later. "However, the difference between then and now is market capitalization, nine billion dollars, but this year's move has swept over $ 250 billion from its peak."

The rand remained stable following the news that the confidence of SA companies was at a minimum from the junk vote of 2017.

At 1.50 pm, the rand was changing hands to R13.84 for the greenback.

OVERVIEW: US stock futures and European equities fluctuated Tuesday while gains in Asian equities were limited after President Donald Trump said he would probably raise tariffs on Chinese imports again, just days before meeting his counterpart Xi Jinping .

Raw materials withdrew, guided by copper. Contracts on Dow, S & P and Nasdaq drifted, while Treasuries and the dollar remained steady before the two senior Federal Reserve officials spoke over the next two days. Equity benchmarks rose in Japan, but remained stable in Hong Kong and China, following Trump's signs that he is ready to pursue plans for higher rates, although the Chinese Foreign Ministry has urged the United States to work towards a positive result at the meeting scheduled for the Group of 20 summit this week.

Brent crude fell back to $ 60 a barrel. The Stoxx Europe 600 index was slightly modified, bonds rose across Europe and the euro currency declined. The pound decreased as traders brooded the prospects for parliamentary approval of the Brexit agreement, which according to Trump could jeopardize Britain's ability to enter into a trade pact with the United States.

Foreign trade remains firmly in the minds of investors before the meeting between Presidents Xi Jinping and Trump in Buenos Aires at the end of the week. Trump said in an interview with the Wall Street Journal that Monday, in addition to a planned rise in customs tariffs for $ 200 billion of Chinese imports in January, he also slapped new duties on the remaining imports that have so far escaped his withdrawals, depending on how the negotiations proceed.

This could weigh on optimism for US equities, which rose on Monday amid hopes that a strong start to the Christmas holidays will keep growth on track. The Fed's speakers will be closely monitored for the latest reflections on the trajectory of interest rates while investors remain on the loose as volatility increases.

The speech by President Jerome Powell on Wednesday will be analyzed for possible suggestions on the prospects of a pause in rate hikes next year after economic operators have reduced expectations for the pace of tightening monetary policy. Elsewhere, emerging market currencies weakened and their shares traded slightly. Bitcoin has stabilized near $ 3,700 after losing 14% on Monday. – Bloomberg

Andre Botha, Senior Currency Dealer at TreasuryONE said in a morning note to customers: "There are a couple of risks to emerging market currencies this week and where we initially thought the risk would be towards the end of the week, it suddenly crashed in the foreground yesterday.

"The main risk for EM this week is the meeting between US President Trump and his Chinese counterpart, but President Trump said yesterday that he would try to use additional commercial rates in the event that no agreements were signed commercials over the weekend by the president of the United States have caused a bit of fear in the EM and we have seen a bit of transition to safe havens yesterday with the US dollar ending the day on the front row.

"Oil that lost nearly $ 30 a barrel in recent weeks has stopped the slide yesterday closing the day above $ 60 a barrel.

"The gold, on the other hand, has lost a bit of ground and is also one of the reasons, along with the stronger dollar, because the club has slipped on a bit of peel With the data cabinet on the empty side, we'll still take some momentum from Trump's comments and we could see the rand losing ground today.

"The other side of the coin is that, despite the recent strength of the dollar, the rand has been resilient under the handle R14.00, which suggests that there is still risky behavior in the rand, which presents a recipe for the trade of rands inside of intervals very similar to yesterday as the market seeks a new direction ".

Rand marginally stronger in early trading

The rand is trading at 13.87 / $ at 10:00, up 0.2% from the greenback.

Earlier in a note to customers, Andre Botha, a senior currency dealer with TreasuryONE, said there will be a couple of risks to emerging market currencies this week.

"The main risk for EM this week is the meeting between US President Trump and his Chinese counterpart," Botha said. "However, President Trump said yesterday that he would try to use additional commercial rates in the event that no commercial agreement was reached on weekends: these harsh tactics by the US president caused a little fear in the EM and we saw a bit of a shift yesterday to safe havens with the US dollar ending the day on the front foot.

"Oil that has lost nearly $ 30 a barrel in recent weeks has stopped the slide yesterday closing the day above $ 60 a barrel, while gold has lost a bit of land and is also one of the reasons, along with the stronger dollar, why the club slipped on a piece of banana peel, with the data cabinet on the empty side, we will still take stock of Trump's comments and we could see the rand lose today.

"The other side of the coin is that, despite the recent strength of the dollar, the rand has been resilient under the handle R14.00, which suggests that there is still risky behavior in the rand, which presents a recipe for the trade of rands inside of intervals very similar to yesterday as the market seeks a new direction ".