Asia-pacific Markets Firmer as China Returns From Break; U.S Debt Ceiling Helps Boost Sentiment

08/10/2021 Shares in Asian markets marched ahead on Friday as Chinese shares returned from a one week holiday and easing concerns about the U.S. debt ceiling. Treasury yields ticked up ahead of a key American jobs report. U.S. contracts climbed after the Senate approved legislation to temporarily raise the federal government’s $28 trillion debt limit and avoid the risk of a historic default later this month. Japanese shares outperformed regional peers, while China advanced after reopening from a long holiday. China’s stocks benchmarks ignored the ongoing focus on property-sector debt woes and Beijing’s wider regulatory crackdowns. The 10-year U.S. Treasury yield reached the highest since mid-June, benchmark rose 1.6 basis points to 1.58%, its highest since it touched 1.594%. Investors are fretting over inflation amid a global energy crunch, and the U.S. payrolls report Friday could cement expectations that the Federal Reserve will soon start tapering bond purchases.

Bitcoin: the recent rally paused around $54,000 level.
OIL: extended a rebound after the U.S. Energy Department said it has no plans “at this time” to tap into the nation’s oil reserves to help quell rising fuel prices. Brent crude futures jumped 92 cents, or 1.12%, to $82.89 a barrel at the writing, alongside Texas’ WTI, light sweet, futures climbed by $1.02, or 1.15%, to $79.32 a barrel . Analysts said the surge in gas prices and the extent of fuel switching from gas to oil would be the key factor to watch now.

GOLD: the yellow metal was down on Friday morning, but held steady as investors refrained from making big bets ahead of the latest U.S. jobs report. Gold futures inched down 0.05% to $1,757.60, down about 0.3% so far in the week.

Here are some events to watch this week:
• Reserve Bank of India monetary policy decision on Friday
• The U.S. Labor Department releases unemployment and job creation data Friday

Local Market:
On Thursday the local bourse gained 1.83% to 65,157.75 points and the blue-chip Top-40 rose 2.08%. Miners led the gains on the JSE the local market followed its global peers higher as U.S. worked to avoid an immediate debt crisis. Precious metals advanced 6.36%, while industrial metals gained 3.93%. Resources climbed 4.08% and industrials 1.55%. Banks and financials swam against the tide, bucked the trend, slowing down 0.69% and 0.66% respectively. Platinums led the gains in the precious metals sector, with Northam jumping 10.85% to R200.30, Impala Platinum gained 8.97% to R185.25 and Royal Bafokeng Platinum added 8.65% to R82.04. The rand is steady around R14.98/$, having eased 0.60% against the greenback for the week so far. Yield on 10-year govt rand bonds fell 5.60 bps to 9.81%. Tencent 1.61% firmer in Hong Kong after China’s better-than-expected PMI service data. Top-40 futures on marginally in the red -31 points.

SA has finally been removed from the UK’s red list, meaning fully vaccinated travellers returning to Britain after visiting the country from Monday no longer have to spend 10 days in quarantine.

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European stock markets rallied on Thursday, as easing oil and gas prices offered relief to investors worried about runaway inflation, while positive earnings updates added to the upbeat sentiment. The pan-European STOXX 600 index rose 1.60% at the close. Germany’s Dax advanced 1.85%, with the automakers-heavy shrugging off data that showed the country’s industrial output in August dropped the most since April last year. London’s FTSE100 gained 1.17%, with miners Anglo American, Antofagasta and Rio Tinto making decent gains. CAC-40 advanced 1.65%, with Hermes – luxury goods maker – jumping 3.7% after HSBC upgraded the stock to “hold”, while peers LVMH, Richemont and Kering all rose about 2%. European futures currently on the backfoot: FTSE -5points, DAX -22points.
Wall Street stocks were in positive territory from the opening bell to the close on Thursday, as Congress reached agreement to stave off US debt limit for the time being, avoiding a government default, with jobless claims surprising to the downside.
At the close, the Dow was up 0.98%, the S&P 500 bagged 0.83%, alongside the Nasdaq firmer 1.05% at 14,654.02. Also boosting sentiment, initial unemployment claims for the week ended 2 October decreased by 38,000 to 326,000. Economists had been expecting a rise to 370,000. Pfizer and BioNTech shares both closed up after saying they’ve asked regulators to let them administer their Covid-19 vaccine to children ages 5 to 11. U.S. futures remain in positive territory this a.m.

Chinese shares rose on Friday after a week-long national holiday, helped by encouraging service sector data – PMI services 53.4 (actual) vs 46.7 (survey) – and easing political tensions with the United States. The CSI300 index rose 1.26%, while the Shanghai Composite Index gained 0.42%. The Hang Seng index was flat 0.3%. China will continue taking steps to curb monopolistic behavior among internet platform companies and strengthen the protection of consumer privacy and data security, central bank Governor Yi Gang said.

Japan’s Nikkei jumped on Friday, tracking gains on Wall Street. The Nikkei advanced 2.11%. Australia’s ASX 200 advanced 0.87%, with I.T and Materials sectors leading the gains.