Markets Wrap: Rand rebounds; Dow and S&P 500 up as sentiment shifts to riskier assets

The rand clawed back some ground against the dollar after threatening the R14.40-level in early trade on Monday morning, consolidating to last trade around R14.23 against the greenback. The rand was helped by the US dollar, also rebounding from the lows of this morning, reports TreasuryONE.

“It seems that the local unit is currently joined at the hip with the US dollar, and any movement on the greenback will be mirrored by EM currencies,” the trading house said in its closing market report to clients.

On the commodities front, all the hard commodities staged a comeback from the lows of the last couple of days as the market is still taking stock from the Federal Reserve’s comments of last week. Palladium gained the most, with the metal up 3% on the day. Gold is trading at $1,781, platinum at $1,052 and palladium at $2,542, while Brent Crude also traded in the green, with the price currently at $74.37 a barrel.

In the international currencies and equities markets the US dollar fleetingly threatened to break below the 1.1850 level but has since drifted out to above 1.19 and was last at 1.1920. The drift higher has played into the hands of emerging market currencies, with most rebounding off last week’s lows.

“A lot of the negative sentiment of last week has been arrested as we have seen the US equity market firmly in the green in early US trade. The Dow and the S&P 500 is more than 1.5% up this morning as sentiment has shifted back to riskier assets. Should the momentum continue, we believe that the rand could trickle back to the R14.15 level overnight, but we need to be wary of the US dollar, as it is currently the market driver,” wrote TreasuryONE.

Indicators as of 17:00 CAT

USDZAR           14.2299
EURUSD           1.1918
EURZAR            16.9541
GBPUSD          1.3913
GBPZAR           19.7843
AUDZAR          10.7133
CADZAR           11.4909
CNYZAR            2.1979
ZARJPY            7.7428
CHFZAR            15.4902
USDAOA          645.53

Equities and bonds
R186                7.46%
US 10 Year       1.48%
JSE                 -0.01%
FTSE               0.52%
S&P 500          1.10%

Gold               $1 781.38
Plat               $1 048.36
Plad               $2 545.23
Rhod               $20 890.00
Irid                $6 090.00
Ruth                $748.00
Copp               $9 042.50
Brent               $74.27
Iron Ore 62.5% $214.21
Coal API4         $111.00
Gold ZAR         R25 341.20
Plat ZAR           R14 913.55

Indicators brought to you by TreasuryONE

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