U.S. Futures Rise; Traders Await Comments From Treasury Secretary Nominee Yellen

19/01/2021 Markets in Asian rose on Tuesday with U.S. futures and bond yields ticked up as investors awaited comments from Treasury Secretary nominee Janet Yellen on stimulus. The dollar retreated. Hong Kong stocks outperformed, helped by continued inflow from Chinese investors buying national firms that had been sold off on U.S. restrictions. Benchmarks in China slipped. Wall Street closed on Monday due to Martin Luther King holiday.

Locally the JSE gained 0.26% to 63,713.87 points and the Top-40 was up 0.17% as better-than-expected Chinese data lifted sentiment. China’s GDP jumped 6.5% in the final quarter of 2020, topping forecasts and pre-pandemic growth rates. The data also meant the world’s second-largest economy was the only major one to avoid a contraction in 2020. Rand strengthens 0.31% to 15.10 per US$ ,Yield on 10-year govt rand bonds rose 0.90 bps to 8.85 bps.

EQUITY PREVIEW:
• BofA Sees South African Stocks Posting Further Gains Amid Recovery
• Citi Prefers Pick n Pay, Sees Further Scope for Cost Savings
• UBS, Deutsche Bank Bullish on Richemont Prospects as Cartier Hot
• Truworths Soars After Trading Update, Drives Retailers Higher
MEDIA SUMMARIES:
• South African Treasury Mulls Tax Hike to Fund Vaccines, BD Says
ECONOMIC DATA:
• 11:30am: Nov. Mining Production YoY, est. -5.0%, prior -6.3%
• 11:30am: Nov. Mining Production MoM, est. 0.8%, prior -0.3%
• 11:30am: Nov. Platinum Production YoY, prior 2.4%
• 11:30am: Nov. Gold Production YoY, prior -3.9%

EU/UK/US
European markets closed firm, with the exception of the FTSE100 as travel and leisure shares were under pressure amid concerns about the Covid-19 crisis. The termination of merger talks between French retailer Carrefour and Canada’s Alimentation Couche-Tard also dampened sentiment. The pan-European stoxx 600 closed 0.20% firmer, with the CAC-40 edging up 0.10, while the Dax gained 0.44%.
U.S stock index futures gain of high hopes ahead of Biden’s inauguration. Dow futures up 0.45%, S&P 500 up 0.60% and the Nasdaq’s futures skyrocketing 1.01%.
These are some key events coming up in the week ahead:
• Joe Biden takes office as U.S. president on Wednesday.
• Earnings come from companies including Bank of America, Morgan Stanley, Procter & Gamble, Intel, and Netflix.
• Policy decisions are due Wednesday from central banks in Brazil, Malaysia and Canada. The Bank of Japan and the ECB deliver decisions Thursday.

ASIA
Tech stocks including Samsung and TSMC were the biggest boosts to the MSCI Asia Pacific Index, which jumped as much as 1.4%. Hong Kong’s Hang Seng led the advance, gaining 2.45%, and the Nikkei 225 in Tokyo gained 1.46%. In Australia, the ASX 200 rose 1.19% and the Shanghai Composite index gave up 1.01%.

Oil mixed on Tuesday, investors weighing optimism that further stimulus measures will buoy economic growth against mounting fears for fuel demand as COVID-19-induced lockdowns continue globally. Brent oil futures were up 0.35% to $54.93, while WTI futures were down 0.32% to $52.19. Both Brent and WTI futures remained above the $50 mark.