01/06/2021 Stocks and equity futures were steady, commodities rose and the dollar is softer amid optimism about the economic recovery from the pandemic. MSCI Inc.’s gauge of Asian equities edged up to the highest level in over a month. Sentiment was helped by reports signalling manufacturing grew in Asia in May despite Covid-19 flareups. S&P 500, Nasdaq 100 and European futures were little changed following a U.S. holiday.
The dollar weakened versus most Group of 10 peers, and the offshore yuan was stable following China’s latest effort to restrain the currency. The pound rallied to a three-year high on vaccine-led reopening optimism for the U.K. Oil climbed after the OPEC+ alliance forecast a tightening market. Commodities from iron ore to copper also pushed higher, a reminder of the rising costs that are stoking concerns about faster inflation and possible reductions in stimulus.
Locally, the JSE Allshare rose 0.61% with the Platinum names at the top of the gainers, IMP +5.25%, NHM + 5.19% and AMS + 4.67%. The rand remained firmer against the dollar after SA recorded its twelfth consecutive trade surplus in April, with precious metal exports providing the biggest boost. Data from the SA Revenue Service yesterday showed the April surplus at R51.24bn, higher than the Bloomberg consensus of R37.5bn. South Africa’s unemployment rate probably rose to a record 33.5% in the first quarter from 32.5% in the three months through December, according to the median estimate of 6 economists in a Bloomberg survey. IG Markets are up 286 points and Tencent up 1.62% so we in for a better open again this morning.
• Gold Heads for Biggest Monthly Gain Since July on Inflation Bets.
• Central Bank Head Enters Fray Over South Africa School Diversity.
• Absa Reports Total Capital Adequacy Ratio of 15.1% at March 31.
• Standard Bank Expects to Declare Interim Dividend in August.
• S. African Regulator Approves Sasol Plant Sale to Air Liquide.
• Naspers-Prosus share swap: idiotic or ingenious?
• 11am: May Absa Manufacturing PMI, est. 55.5, prior 56.2.
• May Naamsa Vehicle Sales YoY, est. 215.9%, prior 6133.3%
Europe’s major indexes closed in the red on Monday, as investors digested inflation data from some of the region’s biggest economies on a quiet day due to holidays in the U.K. and U.S. Germany’s DAX provisionally ended the day down 0.7%, retreating from an all-time high hit last week. France’s CAC was also around 0.7% lower at the end of the day. Spain’s IBEX fell around 0.9%. The German index was weighed down by Deutsche Bank, whose share price fell as much as 2% after reports that the U.S. Federal Reserve said it was concerned about the German lender’s anti-money laundering practices. By the end of the day it had pared some losses to close around 1.3% lower.
US futures are slightly better this morning as markets open again after yesterday’s Memorial Holiday. Dow + 19 pts, S&P +4 pts and Nasdaq + 7 pts.
Shares in major Asia-Pacific markets were mixed in Tuesday trade, as investors reacted to the release of a private survey on Chinese manufacturing activity in May. The Caixin/Markit manufacturing Purchasing Managers’ Index (PMI) for May came in at 52, higher than expectations for a reading of 51.9 by analysts in a Reuters poll. The figure for May also compared against April’s reading of 51.9. Japan’s Nikkei 225 slipped sat below the flatline in afternoon trade while the Topix index edged 0.15% higher. South Korea’s Kospi gained 0.58%. Shares in Australia slipped, with the S&P/ASX 200 declining fractionally. The Reserve Bank of Australia on Tuesday announced its decision to hold steady on its current policy settings, including keeping the cash rate at 0.1%. The MSCI Asia index rose to the highest in a month, taking total gains made so far this year to nearly 7%.
Gold prices on Tuesday traded near a five-month high scaled last week, supported by a softer dollar and growing inflationary pressures, while investors awaited key U.S. data that will provide a clearer picture on the global economy’s recovery path. Spot gold is at its highest level since Jan the 8th $ 1914 an ounce, Platinum is up 0.39% at $ 1194 and Palladium up 0.95% at $ 3858.
Oil prices rose on Tuesday, with Brent topping $70, as optimism grew over the fuel demand outlook during the summer driving season of the United States, the world’s top oil consumer. Brent $ 70.28, WTI $ 67.68