Markets boosted by US tax reform hopes, as South African rand tumbles – business live

South Africa’s currency is suffering heavy losses in early trading, on rumours that the country’s finance minister is about be sacked.

The rand tumbled by almost 2.2% at the open, to just 13.01 rand to the US dollar.

As this video clip of the US dollar-rand exchange rate shows, it was a very sharp move indeed.

South African government bonds also came under pressure, sending the yield (or interest rate) on the debt sharply higher.

The selloff came after finances chief Pravin Gordhan was dramatically summoned back to South Africa, from a trip to meet investors in the UK and America.

This has sparked speculation that prime minister Jacob Zuma might be planning a cabinet reshuffle. The two men have been locked in something of a power struggle recently, with Gordhan resisting pressure from Zuma to raise government spending and borrowing.

They have also clashed over an influential business family, the Guptas, who are friendly with Zuma – and accused of wielding undue political influence.

Bloomberg reported earlier today that Gordhan’s job might be on the line. That helped to send the rand sliding, as the finance minister is popular with City investors.

Good morning, and welcome to our rolling coverage of the world economy, the financial markets, the eurozone and business.

What goes down must come up again. So we’re expecting Europe’s financial markets to open higher today today, and claw back some of Monday’s losses.

Last night, America’s Dow Jones Industrial Average racked up its longest losing streak since 2011, after the Republican Party was forced to pull its proposed replacement for Obamacare.

The theory in the City today is that following his failure to get healthcare reform through Congress last week, Donald Trump will be determined to achieve some tax reforms.

As Michael Hewson of CMC Markets explains:

President Trump may have to modify his style somewhat, and add a few chapters to his book “The Art of the Deal” and work on the art of the schmooze. His belligerent style may work well on the campaign trail but on Capitol Hill it doesn’t work well at all.

For all his optimism that he can park his health care reforms and come back to them later, while moving on to tax reform, and or infrastructure spending, there is rising scepticism amongst investors that he will fare much better on this score either, however some in the market do appear to want to give him the benefit of the doubt for now.

However…. the president doesn’t appear to be in the mood for schmoozing. Instead, he took to Twitter last night to blame his own side for the healthcare debacle:

Also coming up today….

There may be drama in South Africa, after the country’s finance minister was recalled from an investor roadshow yesterday; something that has worried investors.

MPs on the Business committee are holding an inquiry into the Future of Work today. They’ll hear from, among others, Transline – the employment agency which suppliers workers to Sports Direct, and which was axed by Amazon two weeks ago.

On the corporate front, building materials group Wolseley, betting chain Ladbrokes Coral, drinks maker AG Barr and top-hat-and-tails renters Moss Bros are all reporting results.

We’ll be tracking all the main events through the day….