Morning report (18.5)

Local equities closed 0.5% lower after a volatile day, reports Nico Kelder, economist at the Efficient Group.

The largest losses were in resources, construction and retail stocks. The currency gained 0.5% against the majors and the dollar strengthened against the euro.

Bond yields traded higher, indicating a higher expected future repo-rate. Commodities declined proportionally more than the dollar strengthened, confirming that the upward march in commodity prices have come to a (temporary) halt.

European and US markets traded higher with the Dow Jones gaining 1% on the news that the Fed chairman will remain in the hot seat for another term.

The Far East seems to be determined to make up the losses recorded over the previous days. We expect that the positive international markets should help local stocks higher but once again the currency could spoil the party.