WHAT HAPPENED OVERNIGHT IN THE US:

·         S&P +0.3%, held Monday’s gains in session largely dependent on energy – and Brexit headlines across the pond.

·         GBP had earlier tanked on UK legal opinion insisting EU Brexit ‘backstop’ guarantee inadequate (potentially leaving UK trapped in customs union).

·         But when dust settled, USD little changed. Feb CPI +1.5% y/y – but 2.1% at core - left US Treasury yields hovering around 2-month lows.

·         Oil back above $67 in support of energy on reports of OPEC+ cuts extension through H2 (to be agreed at March 17 meeting).  

·         That was bad news for transport. Boeing -6.2%, re-plumbed Monday’s lows as EU announced 737 airspace bans.

·         US trade envoy Lighthizer earlier testified to Senate that China deal still faced “major issues”, leaving trade-sensitive industrials adrift.

·         But for all that, UK Brexit vote remained main focus. UK govt vote defeat in last hour of US markets saw S&P dip back to lows.

 SOUTH AFRICAN NEWS:

•         Expect AllShare +0.50%. From SA close, S&P -0.1%, gold +$7 ($1304), plat +$4 ($836), pall -$3 ($1536), copper -0.7% ($2.92/lb), oil -0.1% ($66.91), Dalian iron +0.7%, Dalian coal +0.3%, steel rebar +0.2%, BHP +0.25%, USDZAR +0.5% (14.37), Tencent -0.4% (HKD 359).

•         Today’s XDs (102 index pts): AIP 100c/AGL 721c/ASR 1000c/DSY 101c/GFI 20c/KIO 1573c/L2D 12.69c/SHP 156c/SOL 590c/TPC 30c/TRU 249c/WHL 92c. RBP ex rights 2 for 9 at R22 (TERP 2703c)

•         Due today: EOH H1, GRF H1, LBR FY, MPT FY, RMH FY.

•         Also due this week: tmrrw EXX FY, GRT H1, (BTI capital mkts day); Fri INP Q3.

•         UK Brexit deal defeat last night opens the way for Article 50 extension, even if a ‘hard’ Brexit remains a risk. Another vote later today (time tbc) will give MPs the choice - free of party whip - to block a no-deal Brexit on March 29, and another tomorrow will seek to postpone the deadline itself amid expectations that a majority of parliamentarians could eventually support a ‘Norway-style’ compromise. Sterling continues to see that as glass-half-full (GBPZAR +0.4% >18.83) though Brexiters have warned that any Article 50 extension would ultimately need to be agreed to by EU.

TODAYS KEY DATA POINTS:

•         12pm: SA Q1 BER Business Confidence, Eurozone Jan Ind Prod

•         2.30pm: US Feb PPI, Jan Durables