New US sanctions on the cards, and bad news about South Africa’s mining sector

The rand ended Thursday, 13 August, trading at R16.19 to the United States dollar, slightly weaker but still hovering near its five-month high.

This was despite South Africa’s weaker-than-expected mining production data released on Thursday, which showed that mining output fell 4% year-on-year in June.

While the rand shrugged this off, the JSE ended the day in the red, with the All Share Index down 0.75% and the Top 40 down 0.90%.

South Africa’s benchmark 2035 government bond also weakened, with the yield rising 11 basis points to 8.42%.

Asian equity markets had a more mixed performance, with the Nikkei up, while the Hang Seng and Shanghai Composite were down.

Wall Street had a good day, driven by softer-than-expected Producer Price Index data, easing fears that the Federal Reserve may still hike interest rates.

The S&P 500 gained 0.65%, reaching another record high, while the Nasdaq Composite rose 0.81% and the Dow added 0.13%.

This was mostly driven by chip and AI-linked stocks, including Micron and Intel. However, some individual tech earnings disappointed, including Cisco.

In commodity markets, Brent crude oil has risen slightly to $87.11 per barrel, while gold is down to $4,324 per ounce.

On Thursday, the United States signalled that it is prepared to sustain its naval blockade and associated pressure measures indefinitely.

While mediators, including Oman and Pakistan, are still exploring avenues for renewed talks, negotiations remain deadlocked.

On Friday morning, the rand was trading at R16.20 to the US dollar, R18.69 against the euro, and R21.86 to the British pound.

Important finance and investing news

South Africa doubles down on coal: Electricity Minister Kgosientsho Ramokgopa has made it clear that coal will remain a key part of South Africa’s energy mix. He urged critics not to undermine the science-backed plan by the government to extend the life of Eskom’s coal-fired power stations. [BusinessDay] 

S&P 500 hits new all-time high: Lower-than-expected producer price inflation in the United States propelled American equity indices to new highs. The lower inflation reading has turbocharged expectations of interest rate cuts. [Wall Street Journal]

Chinese cars are taking over the world: Chinese car brands are flooding overseas markets as local demand slumps. Now, Chinese factories are producing so many cars for export that they are running out of ships to load them on, with the price of chartering a ship up 65% year-on-year. [Wall Street Journal] 

Bad news about South Africa’s mining industry: South Africa’s mining sector weakened in the second quarter, with mining production falling 4% year-on-year in June. The biggest declines came from Platinum Group Metals, coal and iron ore. [EWN]

New US sanctions on the cards: The US will soon announce what it bills as unprecedented economic measures against Iran, Treasury Secretary Scott Bessent said. He said the move will be part of a “one-two punch” that includes the continued blockade of Iran’s ports. [Bloomberg/Yahoo Finance]