WHAT HAPPENED OVERNIGHT IN THE US:
· S&P -0.3%, crossed 1250 for 5th time in 8 days – this time back below.
· Yield curve held 100bps (underpin from Treasury secretary Mnuchin’s tax promise on Thurs).
· But financials struggled again – Goldmans still reeling from numbers, and even best-in-class JPM tested 2-month low.
· Oil also weighed. WTI back below $50 for first time in April (Brent <$52.50) on Baker Hughes rig count up for a 14th straight week – at a 2yr high. Positions again too crowded; CFTC specs had moved to multi-week highs in the week leading up to the data.
WHAT’S UP THIS MORNING IN THE EAST:
· EUR rally on French election has helped shunt trade-weighted USD to 6-month low. Risk broadly “on”.
· But as yet, no weak-dollar boost for commodities. Gold back below $1275 as risk recede of Le Pen presidency.
· Japan +1%, lifted by EURJPY up two-and-half-percent. Hong Kong a bit less exciting, but Tencent +0.6% at another record high.
· Australia +0.2%, pinned back by resources. But BHP -0.5% & Rio -0.9%, indicate flat London open, despite Dalian iron -1%, coking coal -4.5%.
SOUTH AFRICAN NEWS:
· Expect AllShare +0.25%. From SA close Fri, gold -$10 ($1274), plat -$6 ($970), copper +0.7% ($2.57/lb), oil unch ($52.25), USDZAR -1.2% (12.99), S&P -0.1%.
· ZAR <13, down through big figure with help from weak USD – as well as long-awaited “Liftoff” from Ramaphosa at weekend speech. Taking aim at Zuma and state capture, reports dailymaverick, the deputy president and contender for party presidency finally “ripped off his muzzle”. Addressing a Chris Hani memorial lecture in Eastern Cape, Ramaphosa repeated his criticism of Zuma’s cabinet reshuffle and called for a judicial commission of inquiry into state capture.
· AGL: Q1 copper-equivalent prod up 9% y/y, driven by iron ore with ramp-up at Minas-Rio (+30%) and another decent performance from KIO (+17%). Metal coal also strong (+28%).
· KIO: Sishen prod up 31%, Kolomela up 3%.
· AMS: Q1 prod up 1% (metal-in-concentrate).
· Also due today: DCP FY.
· AGMs: AGL.
TODAYS KEY DATA POINTS:
· 10am: Germany April IFO