Rand advances for the third day

The rand had its third day of gains on Wednesday, while the JSE snapped a two-day winning streak, as investors ponder the prospects of a slowdown in the spread of Covid-19.

Hope that the spread of the coronavirus may be slowing in some of the most affected parts of the world began to wane on Wednesday, with the death toll having now risen to more than 85,000. Confirmed cases were at 1.46million, with more than 316,000 of those recovered by Wednesday evening.

“Unfortunately, the worst is not behind us. New cases may (I stress, may) be flattening off in the UK, but it’s early days. And even if this is the case, the next two weeks will be incredibly tough with the death toll likely to continue to accelerate,” said Oanda senior market analyst Craig Erlam. “The US isn’t even at this stage yet.

“Economies are still locked down, doors are closed and people are stuck at home. And we don’t know how long this will last.”

The rand gained for a third day on Wednesday, in line with its emergingmarket peers. At 5.20pm, it had firmed 0.56% to R18.1696/$, 0.84% to R19.7506/€ and 0.19% to R22.5259/£. The euro had weakened 0.19% to $1.0868.

“This stability might, in part, be driven by the news that Italy and Spain may have seen the peak of their transmission rate, as well as a perceived plateauing in New York, some good news at a time when the number of Covid-19-related deaths in the city have been assessed to have overtaken 9/11’s death count,” said Rand Merchant Bank analyst Siobhan Redford.

The yield on the R2030 government bond was flat at 10.99%. Bond yields move inversely to their prices.

Gold was little changed at $1,647.08/oz, while platinum added 0.18% to $734.90. Brent crude was up 0.65% to $32.18 a barrel.

Shortly after the JSE closed, the Dow had risen 2.24% to 23,162.35 points, the FTSE 100 was down 1.05%, France’s CAC 40 0.65% and Germany’s DAX 0.52%. Earlier, the Shanghai Composite fell 0.19% and Hong Kong’s Hang Seng 1.17%, while Japan’s Nikkei 225 rose 2.13%.

The JSE all share fell 1.7% to 46,689.90 points and the top 40 1.86%. Resources dropped 1.97% and platinums 4.29%.

The SA Chamber of Commerce and Industry business confidence index fell to 89.9 points in March from 92.7 in February, data showed on Wednesday.