Asian markets mixed as investors seek direction amid hawkish remarks from U.S. Fed. Reserve official

05/08/2021 The MSCI’s broadest index of Asia-Pacific ex. Japan rose 0.22% on Thursday, with equities markets edging up in Japan and Australia. Asian shares held on to gains despite hawkish remarks from a senior official at the U.S. Federal Reserve that boosted the dollar. Richard Clarida, U.S Fed. Reserve Vice Chairman, said he felt the conditions for raising interest rates could be met by the end of 2022.The S&P 500 fell from a record overnight, losses led by lower energy shares, while the technology sector proved more resilient. U.S. contracts climbed. Brent crude steadied around $70 a barrel after a three-day slump exacerbated by the coronavirus resurgence. Gold steadied around $1811, prices ended little changed after rising as much as 1.2% earlier.

Global covid-19 pandemic cases topped 200 million in the 18-months. Israel, one of the world’s most vaccinated nations, called on employers to switch to work-at-home and warned that it may have to impose new lockdowns.

The dollar was poised to push higher on Thursday; the euro was down 0.03% at $1.1833, having recoiled from a top of $1.1899 overnight and marking another failure to crack resistance around $1.1910. The rand retreated 0.33% at R14.3580, having touched intraday best of R14.2240/$ on Wednesday morning.

Locally the JSE broke a three-day losing streak with Naspers and Prosus firming up for the first time in three days, recovering from renewed fears that China’s actions against private enterprises would spread to the entire online entertainment industry. The All-share gained 0.28% to 68,898 points and the Top-40 gained 0.33%. Resources rose 0.77% and industrial metals added 0.78%, while retailers and food producers shed 1.13% and 1.88% respectively . Markets now await US nonfarm payroll data on Friday, and the consensus view is that the country added 880,000 jobs in July. If the number falls short of the mark, it may result in the Fed keeping rates lower for longer than expected. Top-40 futures wavering -160 points on IG markets.

NEWS:
• South Africa Seen Risking More Frequent Unrest Without Reforms
• South African Election Board Will File Application to Delay Vote
• WHO Seeks Booster Halt; Israel Threatens Lockdown: Virus Update
• Telkom Appoints Consumer Unit Head Taukobong as New CEO
• Sasol Tells Workers Vaccinate or Pay for Covid Tests, N24 Says
• South Africa’s Virus Epicenter Shifts South to Cape Town
EQUITY PREVIEW:
• Naspers Backs Insurer Naked in South African Investment Push
• Nedbank Sees 1H EPS Increasing by Between 297% & 302%
• Glencore to Report Results; Shares Up 43.5% YTD: Preview
• South Africa’s Telkom Rises Most in Four Weeks After 1Q Earnings
• Liberty Passes on Interim Dividend as Insurer Returns to Profit
• Prosus, Glencore Among JPMorgan’s Derivatives Plays This Week
• Telkom Reports 1Q Group Revenue Rose 3.5% y/y
MEDIA SUMMARIES:
• Daily Maverick: VBS Scandal: The matter of SARS v Kabelo Matsepe (feat. South African people’s Constitutional Rights)
• Business Day.za: Mango gets extension for business rescue practitioner
• Business Day.za: EXCLUSIVE: No ministers are safe as Ramaphosa prepares to wield axe
• Moneyweb: MultiChoice yet to receive official notification of massive Nigerian fine
• Fin24: CNA business rescue practitioners level serious claims against former CEO
• News24: Digital Vibes contract: R1m allegedly spent on Mkhize’s son, daughter-in-law’s beauty shops – report
EARNINGS:
• Glencore Plc (GLEN LN)
• Hammerson Plc (HMSO LN)
• JSE Ltd. (JSE SJ)
• Mondi Plc (MNDI LN)
• Sappi Ltd. (SAP SJ)
• Textainer Group Holdings Ltd. (TGH US)
ECONOMIC DATA:
• 1pm: June Electricity Consumption YoY, prior 12.3%
• 1pm: June Electricity Production YoY, prior 12.1%
CORPORATE EVENTS:
• Annual General Meetings: BRAIT LX, INVP LN
EK/UK/US
European shares marched to fresh highs on Wednesday as investors focused on upbeat quarterly earnings and a strong rebound in merger activity despite concerns about the global spread of the Delta variant of coronavirus. The pan-European Stoxx 600 index rose 0.5% in its third day of record gains. London’s FTSE100 closed firm 0.26% as investors digested solid results from Legal & General, Taylor Wimpey, and the latest reading on the UK services sector. German’s Dax advanced 0.88%, the fashion house Hugo Boss rose 1.3% after it forecast a rebound in its business to continue in the second half of the year. Paris’ CAC-40 saw the session out 0.33% stronger. European futures remain flat at the moment.

U.S. stocks closed mostly lower on Wednesday, with the S&P 500 receding 0.46% from a record high. The blue-chip Dow slid 0.92%, though the tech heavy Nasdaq eked out small gains at 0.13% with investors attaching greater weight to positive data from the services sector than to negative jobs figures (ADP). The yield on the benchmark 10-year Treasury note was drawing attention as well, trading broadly flat at around 1.163% after having dipped below 1.13% earlier in the session. General Motors raised its full-year guidance despite missing earnings expectations for the second quarter. Private sector employment in the US grew less than expected in July amid a shortage of workers, according to the latest figures from ADP -employment rose by 330,000 from June, versus expectations for a 695,000 increase. The U.S. futures, main three benchmarks, are positively up 0.11% across the board at the time of the writing.

Here are some key events to watch this week:
• Bank of England is expected to keep its benchmark interest rate and its bond-buying target unchanged Thursday
• The U.S. jobs report is expected to show another robust month of hiring Friday

ASIA
Japan’s Nikkei share average rose on Thursday, underpinned by upbeat earnings from Hitachi Zozen and Sony Group, although gains were capped by concerns about surging cases of COVID-19. The country reported an unprecedented 14,207 jump in new cases on Tuesday, led by a record 4,166 infections for Olympics-host Tokyo. The tech-heavy Nikkei rallied 0.46% higher, as technology shares tracked a firm finish on Wall Street. In Australia, the ASX200 was kept afloat 0.29% by technology shares and financials. Chinese stocks took a beating with Communist Party rulers seeking to remake the property, technology and education sectors to curb cost pressures and better serve ordinary people. The Shanghai Composite remained flat 0.09%, while the CSI300 dipped 0.09%.

Asian markets mixed as investors seek direction amid hawkish remarks from U.S. Fed. Reserve official

The MSCI’s broadest index of Asia-Pacific ex. Japan rose 0.22% on Thursday, with equities markets edging up in Japan and Australia. Asian shares held on to gains despite hawkish remarks from a senior official at the U.S. Federal Reserve that boosted the dollar. Richard Clarida, U.S Fed. Reserve Vice Chairman, said he felt the conditions for raising interest rates could be met by the end of 2022.The S&P 500 fell from a record overnight, losses led by lower energy shares, while the technology sector proved more resilient. U.S. contracts climbed. Brent crude steadied around $70 a barrel after a three-day slump exacerbated by the coronavirus resurgence. Gold steadied around $1811, prices ended little changed after rising as much as 1.2% earlier.

Global covid-19 pandemic cases topped 200 million in the 18-months. Israel, one of the world’s most vaccinated nations, called on employers to switch to work-at-home and warned that it may have to impose new lockdowns.

The dollar was poised to push higher on Thursday; the euro was down 0.03% at $1.1833, having recoiled from a top of $1.1899 overnight and marking another failure to crack resistance around $1.1910. The rand retreated 0.33% at R14.3580, having touched intraday best of R14.2240/$ on Wednesday morning.

Locally the JSE broke a three-day losing streak with Naspers and Prosus firming up for the first time in three days, recovering from renewed fears that China’s actions against private enterprises would spread to the entire online entertainment industry. The All-share gained 0.28% to 68,898 points and the Top-40 gained 0.33%. Resources rose 0.77% and industrial metals added 0.78%, while retailers and food producers shed 1.13% and 1.88% respectively . Markets now await US nonfarm payroll data on Friday, and the consensus view is that the country added 880,000 jobs in July. If the number falls short of the mark, it may result in the Fed keeping rates lower for longer than expected. Top-40 futures wavering -160 points on IG markets.

NEWS:
• South Africa Seen Risking More Frequent Unrest Without Reforms
• South African Election Board Will File Application to Delay Vote
• WHO Seeks Booster Halt; Israel Threatens Lockdown: Virus Update
• Telkom Appoints Consumer Unit Head Taukobong as New CEO
• Sasol Tells Workers Vaccinate or Pay for Covid Tests, N24 Says
• South Africa’s Virus Epicenter Shifts South to Cape Town
EQUITY PREVIEW:
• Naspers Backs Insurer Naked in South African Investment Push
• Nedbank Sees 1H EPS Increasing by Between 297% & 302%
• Glencore to Report Results; Shares Up 43.5% YTD: Preview
• South Africa’s Telkom Rises Most in Four Weeks After 1Q Earnings
• Liberty Passes on Interim Dividend as Insurer Returns to Profit
• Prosus, Glencore Among JPMorgan’s Derivatives Plays This Week
• Telkom Reports 1Q Group Revenue Rose 3.5% y/y
MEDIA SUMMARIES:
• Daily Maverick: VBS Scandal: The matter of SARS v Kabelo Matsepe (feat. South African people’s Constitutional Rights)
• Business Day.za: Mango gets extension for business rescue practitioner
• Business Day.za: EXCLUSIVE: No ministers are safe as Ramaphosa prepares to wield axe
• Moneyweb: MultiChoice yet to receive official notification of massive Nigerian fine
• Fin24: CNA business rescue practitioners level serious claims against former CEO
• News24: Digital Vibes contract: R1m allegedly spent on Mkhize’s son, daughter-in-law’s beauty shops – report
EARNINGS:
• Glencore Plc (GLEN LN)
• Hammerson Plc (HMSO LN)
• JSE Ltd. (JSE SJ)
• Mondi Plc (MNDI LN)
• Sappi Ltd. (SAP SJ)
• Textainer Group Holdings Ltd. (TGH US)
ECONOMIC DATA:
• 1pm: June Electricity Consumption YoY, prior 12.3%
• 1pm: June Electricity Production YoY, prior 12.1%
CORPORATE EVENTS:
• Annual General Meetings: BRAIT LX, INVP LN
EK/UK/US
European shares marched to fresh highs on Wednesday as investors focused on upbeat quarterly earnings and a strong rebound in merger activity despite concerns about the global spread of the Delta variant of coronavirus. The pan-European Stoxx 600 index rose 0.5% in its third day of record gains. London’s FTSE100 closed firm 0.26% as investors digested solid results from Legal & General, Taylor Wimpey, and the latest reading on the UK services sector. German’s Dax advanced 0.88%, the fashion house Hugo Boss rose 1.3% after it forecast a rebound in its business to continue in the second half of the year. Paris’ CAC-40 saw the session out 0.33% stronger. European futures remain flat at the moment.

U.S. stocks closed mostly lower on Wednesday, with the S&P 500 receding 0.46% from a record high. The blue-chip Dow slid 0.92%, though the tech heavy Nasdaq eked out small gains at 0.13% with investors attaching greater weight to positive data from the services sector than to negative jobs figures (ADP). The yield on the benchmark 10-year Treasury note was drawing attention as well, trading broadly flat at around 1.163% after having dipped below 1.13% earlier in the session. General Motors raised its full-year guidance despite missing earnings expectations for the second quarter. Private sector employment in the US grew less than expected in July amid a shortage of workers, according to the latest figures from ADP -employment rose by 330,000 from June, versus expectations for a 695,000 increase. The U.S. futures, main three benchmarks, are positively up 0.11% across the board at the time of the writing.

Here are some key events to watch this week:
• Bank of England is expected to keep its benchmark interest rate and its bond-buying target unchanged Thursday
• The U.S. jobs report is expected to show another robust month of hiring Friday

ASIA
Japan’s Nikkei share average rose on Thursday, underpinned by upbeat earnings from Hitachi Zozen and Sony Group, although gains were capped by concerns about surging cases of COVID-19. The country reported an unprecedented 14,207 jump in new cases on Tuesday, led by a record 4,166 infections for Olympics-host Tokyo. The tech-heavy Nikkei rallied 0.46% higher, as technology shares tracked a firm finish on Wall Street. In Australia, the ASX200 was kept afloat 0.29% by technology shares and financials. Chinese stocks took a beating with Communist Party rulers seeking to remake the property, technology and education sectors to curb cost pressures and better serve ordinary people. The Shanghai Composite remained flat 0.09%, while the CSI300 dipped 0.09%.