U.S Treasury Yields At One-Year High; Platinum Retreats

17/02/2021 US Treasury yields at the highest in a year, while global stocks pulled back from a record as investors weighed how the increase in yields could impact risk assets. The dollar strengthened. U.S. stock futures retreated after the benchmarks set record Tuesday. Asian equities broadly lower, China remains shut for a week-long holiday and will reopen Thursday. Oil slipped back below $60 a barrel in New York amid a deepening energy crisis in the U.S. that has crippled the petroleum industry.Bitcoin broke through $50,000 for the first time before falling back. Platinum pulled back to trade 0.20% weaker at $1,265.03/oz on Wednesday. Gold fell 0.11% to $1,792.48. At the same time, Brent crude was 0.13% firmer at $63.43 a barrel.

The JSE gained 0.15% to 67,227.06 points and the Top-40 0.16%. The gold mining index fell 2.44%, platinums 1.32% and banks 0.78%. Among platinum stocks; Royal Bafokeng lost 1.79% to R85.20, while Sibanye-Stillwater fell 1.43% to R68.99 and Impala dropped 1.3% to R230.05. Progress in Covid-19 vaccine rollouts in many countries is raising hopes of further recovery in economic activity, with SA making headway in dealing with delays in its own programme.

EQUITY PREVIEW:
• Northam Platinum Sees Operating Profit Increase For 1H F2021
• Spar Drops Most in 10 Months as Trading Update Disappoints
EARNINGS:
• British American Tobacco Plc (BATS LN)
• Textainer Group Holdings Ltd. (TGH US)
ECONOMIC DATA:
• 10am: Jan. CPI MoM, est. 0.5%, prior 0.2%
• 10am: Jan. CPI YoY, est. 3.3%, prior 3.1%
• 1pm: Dec. Retail Sales Constant YoY, est. -2.2%, prior -4.0%
• 1pm: Dec. South Africa Retail Sales Co, est. 0.5%, prior 1.8%
GOVERNMENT:
• Finance Minister Tito Mboweni will brief lawmakers about interventions aimed at addressing budget shortfalls that have impacted on statistics gathering
• Eskom officials will brief lawmakers about the impact of coal prices, loadshedding, tariffs and other factors on electricity supply
CORPORATE EVENTS:
• Annual General Meetings: CML SJ, CTK SJ, TBS SJ

EU/UK/US
European stocks closed below the waterline on Tuesday, despite gains for miners and banks. The pan-European Stoxx 600 dipped 0.06%, the UK FTSE 100 slipped 0.11% even as the country’s health service met its first Covid vaccination target of elderly people. France’s Cac-40 on the other hand was flat, while the DAX gave up 0.32%. According Eurostat, EU’s GDP contracted 0.6% in 4Q2020 on a seasonally adjusted basis, better than the preliminary reading of -0.7% and followed a rebound of 12.4% over the three months to September and a 11.7% drop in the second quarter.

Wall Street closed mixed on Tuesday as the Dow managed to extend its February rally a little further. At the close, the Dow was up 64.35 points, or 0.20%, while the S&P 500 was 0.06% softer and the Nasdaq saw out the session 0.34% weaker. The main driver of the day’s moves was that the 10-year Treasury yield jumped nine basis points to top 1.30%, a watermark last seen in February 2020, while the 30-year rate also hit its highest level in a year. U.S. stock futures are flat to little changed.

Here are some key events coming up:
• Earnings roll on with companies including, Daimler, Credit Suisse, Deere, Danone and Nestle.
• Federal Open Market Committee minutes from the January meeting are due Wednesday.
• U.S. retail sales figures come on Wednesday.

ASIA
Asia Pacific stocks were mostly down on Wednesday morning. Japan’s Nikkei 225 was down 0.59%, Australia’s ASX 200 was down 0.42%. The country is set to end a snap five-day lockdown in Victoria state after no new COVID-19 cases were reported in a cluster linked to a quarantine hotel in the city of Melbourne. Hong Kong’s Hang Seng Index edged up 0.10%, with Tencent 0.80% firmer. Strict social distancing measures will be relaxed from Thursday, including the extension of restaurant hours, doubling the number of people allowed to sit at a table and re-opening certain venues.