WHAT HAPPENED OVERNIGHT IN THE US:
· S&P -0.1%, traded quietly into FOMC, rallied then faded to end little changed.
· Fed saw “low” inflation tempering stronger jobs market – meaning statement not out-&-out hawkish as expected.
· No Yellen Q&A meant no chance to clarify. Gold jumped back above $1340, and Fed fund futures slightly less sure of 2016 hike (45%).
· From SA close, EM currencies back at recent best – and SA golds all better (ANG +1.4%, GFI +2.2%, HAR +3.8%, SGL +2.6%). But one big fly in ointment.
· SAB ADR closed equiv £42.70 (vs London close £43.80) after integration plans halted. Molson coors -5%, brought week-to-date losses to more than eight percent on deal risk.
WHAT’S UP THIS MORNING IN THE EAST:
· Asia slightly lower, but stripping out Japan losses (on firmer Yen vs weaker USD), it doesn’t look too bad.
· Hong Kong -0.4%, giving back a slither of week’s gains (Tencent -0.2%). China little changed, flip-flopping all morning in quiet trade.
· Australia +0.3%, kept afloat mainly by materials. Rio +2.4%, indicates London +1% - riding Dalian futures up another three percent (=spot >$60/t).
· BHP +0.7%, lagging on soft oil – and after announcing $1.1bn-$1.3bn provision for their 50% share of Samarco, in line with most analysts’ expectations.
SOUTH AFRICAN NEWS:
· Expect AllShare unch. From SA close yday, gold +$12 ($1339), plat +$21 ($1142), copper +0.8% ($2.21/lb), oil -0.5% ($43.60), USDZAR -0.5% (14.21), S&P unch.
· SAB: convergence and integration team has been told by board to “pause” deal work, according to internal memo, which has instructed staff not to contact ABI “with immediate effect, and all meetings and calls will be postponed until further notice.” At last night’s close, the PSA (partial share alternative – for which most institutional investors are ineligible) valued SAB at £50.60 vs cash offer £45 – a situation Aberdeen has described as “unacceptable”.
· Earnings due today: AGL H1, BTI H1, ITU H1.
TODAYS KEY DATA POINTS:
· 7am+: Europe earnings (BNP, Lloyds, Renault, Danone, AstraZen, etc)
· 9am+: Germany July CPI
· 11.30am: SA June PPI
· 2.30pm: US initial jobless