18/03/2021 Asian stocks climbed this morning on the Federal Reserve’s projections for interest rates to remain near-zero through 2023. U.S. Treasury yields resumed their rise and the dollar held a decline. MSCI Inc.’s Asia-Pacific index advanced about 1%. The S&P 500 hit a record overnight as Fed Chairman Jerome Powell reiterated the central bank’s tolerant stance on inflation and the recent rise in bond yields. U.S. and European futures are higher. The Australian dollar outperformed most major currencies on a strong jobs report. Japan’s government bond yields lifted on a Nikkei report that the Bank of Japan is considering widening the trading range around the 10-year target, which could spur concerns about policy tightening. Oil slipped after U.S. crude stockpiles topped half a billion barrels and the International Energy Agency said global supplies are plentiful. Bitcoin traded around $59,000. We in for a better start, with the JSE Top 40 futures up 455 points or 0.75%, with Naspers and Prosus that could lend some support as Tencent is trading 3.9% in HK. The Rand remains fairly strong at 14.66 vs the USD.
The FTSE/JSE Africa All-Share Index down 1.2% to 66,494.49. The Rand was little changed at 14.87 per US$, with the Yield on 10-year govt rand bonds that rose 16.30 bps to 9.37 bps.
Mineral Resources and Energy Minister Gwede Mantashe to announce preferred bidders for procurement of 2,000 MW of emergency power, according to statement from ministry.
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- Exxaro Resources Ltd. (EXX SJ)
- Metair Investments Ltd. (MTA SJ)
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- Annual General Meeting: HDC SJ
- Earnings Calls: EXX SJ, MTA SJ
European stocks closed lower on Wednesday as global investors awaited the outcome from the latest meeting of the Federal Reserve. The pan-European Stoxx 600 index provisionally closed down 0.4%, with mining stocks shedding 1.9% to lead losses while autos continued to rally, climbing 3.1%. Earnings on Wednesday came from Munich Re, while BMW released its annual report. BMW shares rose 6.2% after stating it would see significant profit growth this year. Volkswagen shares continued Tuesday’s climb to add a further 11% to lead the Stoxx 600 after forecasting deliveries and earnings growth at its core brand in 2021. At the bottom of the European blue chip index, Austrian electricity company Verbund dropped 7.9% after forecasting a fall in profit for 2021.
U.S. stocks erased earlier losses and jumped higher Wednesday after the Federal Reserve said it sees no interest rate hikes through 2023 and that it will let inflation run hotter than usual to ensure a full economic recovery. The Dow Jones Industrial Average gained 189 points, or 0.6%, to 33,015, marking the first time the blue-chip benchmark has closed above the 33,000 threshold. The S&P 500 erased a 0.7% loss and rose 0.3% to a record closing high of 3,974. The Nasdaq Composite wiped out earlier losses and ended the day 0.4% higher at 13,525. The tech-heavy benchmark fell 1.5% at one point as growth stocks came under pressure amid surging bond yields again. While the Fed expects benchmark interest rates to remain near zero for the next two years, the central bank upgraded their economic outlook to reflect expectations for a stronger recovery from the pandemic-triggered recession. Gross domestic product is expected to grow 6.5% in 2021 before cooling off in later years. Shares of Disney gained 0.5% after CEO Bob Chapek told CNBC that California’s two Disneyland theme parks will reopen on April 30. McDonald’s climbed 1.9% after Deutsche Bank upgraded the stock to buy from hold.
Asia-Pacific markets broadly advanced Thursday as investors reacted after the U.S. Federal Reserve’s policymaking committee voted to keep short-term borrowing rates near zero in a widely expected move. The Nikkei 225 in Japan rose 1.5% while the Topix index added 1.1%. South Korea’s Kospi climbed 1.2% and the Kosdaq was up 0.87%. In Hong Kong, the Hang Seng index rose 1.1% while Singapore’s Straits Times index gained 0.97%. Chinese mainland shares advanced: The Shanghai composite was up 0.45% while the Shenzhen component was up about 0.68%. Australian shares bucked the generally positive trend, with the benchmark ASX 200 slipping 0.43% as most sectors traded lower. But, the energy and materials subindexes recovered from losses in the previous session to trade up 0.37% and 0.24%, respectively.
Gold rose after the Federal Reserve continued to project near-zero interest rates at least through 2023, bolstering demand for the metal. Spot gold rose 0.3% to $1,750 an ounc, after advancing 0.8% on Wednesday. Silver, platinum and palladium all gained.
Oil’s surge in 2021 has hit a rocky patch after U.S. stockpiles rose again and the International Energy Agency said supplies are plentiful. WTI for April was 0.6% lower at $64.22 a barrel. Most-active prices have lost 2.2% this week, putting them on course for the biggest weekly loss since October. Brent for May fell 0.7% to $67.54.
Zinc rose as much as 1% to $2,854 a metric ton on the London Metal Exchange before trading at $2,832.50. Nickel added 0.6% to $16,165 a ton, while aluminum declined and copper was steady
Iron ore futures held around $160 a ton in Singapore as investors weighed the outlook on seaborne balance and demand strength following China’s pollution curbs in its top-steelmaking city. The most-active iron ore contract in Singapore was steady at $160.10 a ton. Futures in Dalian jumped 1.6%, after closing 0.2% lower on Wednesday. Rebar and hot-rolled coil futures climbed in Shanghai.
Some key events to watch this week:
- Bank of England rate decision Thursday. BOE is expected to leave monetary policy unchanged.
- Bank of Japan monetary policy decision and Governor Haruhiko Kuroda briefing Friday.