Global Markets Retreat As Dollar Extends Losses

01/09/2020 The U.S dollar extended losses at the start of a new month with the Euro leading the charge against the greenback, breaching the $1.20 level – almost 0.50% firmer this morning. Asian stocks drifting lower after Wall Street retreated last night, with the exception of the tech stocks. On Monday the JSE/All-share lost 1.04% to 55,476.11 points and the Top-40 dropped 1.01% as losses by banks and media sector – 4.03% and 4.39% respectively – pulled the local bourse down. Naspers dropped 1.5% to close at R3,092.75. The rand 0.60% better this morning at 16.8250 to the dollar as the local currency gave up 2.1% against the greenback yesterday as the market was developments regarding the ANC’s NEC meeting over the weekend where President Ramaphosa was facing off opponents in his party. Yield on 10 year govt rand bonds fell 3 bps to 9.286%. We looking forward to a positive start to the opening, with Top40 (IG markets) up 308 points.
• South Africa’s Ruling Party Backs Ramaphosa’s Anti-Graft Fight
• South Africa Rand Plunges as Political Risk Returns to Radar
• Zambia Says Glencore, First Quantum Willing to Sell Mopani Mine
• EARNINGS: (All times Central African Time) 7:05am: Old Mutual (OMU SJ), 1H through June
• ECONOMIC DATA :Aug. Naamsa Vehicle Sales y/y, est. -24.5%, prior -29.6%
• National Treasury briefs lawmakers on expenditure for 1Q fiscal 2020-21

EU/UK
European markets finished on a down note with disappointing data from France and Germany pulling the Continent’s benchmark indices lower. The pan-European Stoxx 600 index was off by 0.62%, with Germany’s DAX declining 0.67%, while France’s CAC eased back 1.1%. The FTSE100 was closed for Summer Bank Holiday, on Monday.

US
Wall Street closed in the red on Monday, still suffering from Jackson Hole address from Fed. Chair Jerome Powell that interest rates would remain lower for longer. At the close: the Dow had lost 0.78%, with the S&P500 giving up 0.22, while the tech stocks were exceptional with Nasdaq 0.68% firmer at the end of the day. Amazon , Facebook , Netflix and Alphabet have been among the winners. U.S stock index futures slightly up kthis morning: Dow futures 0.13% in the green, S&P500 0.16% firmer while the Nasdaq futures are 0.48% stronger.

Here are some key events to watch this week:
• ISM manufacturing data is due Tuesday in the U.S.
• Australia GDP is due Wednesday.
• U.S. jobless claims for the week ended Aug. 29 are due Thursday.
• U.S. jobs report Friday is forecast to show payrolls continued to rebound in August from virus lows.

ASIA
Asian markets are mixed on Tuesday after strong readings on China’s manufacturing sector. MSCI’s broadest index of Asia-Pacific shares outside Japan rose 0.2%, to regain some ground it had lost on Monday.
The Hang Seng Index in Hong Kong traded 0.2% higher while the Shanghai Composite also recovered early losses to stand 0.1% higher. Japan’s Nikkei 225 erased early losses to trade flat, while Aussie’s ASX200 is down almost 1.50% dragged by financials sector, losing 2.50%.

Commodities
Oil prices recovered on Tuesday, erasing overnight losses. Brent crude futures climbed 1.1%, to $45.77 a barrel, while U.S. WTI crude futures rose 0.9% to $42.98 a barrel.
Both benchmark contracts fell around 1% on Monday on worries about oil oversupply, with global demand stuck below pre-COVID levels.