JSE has its best day in two weeks
The JSE had its best day in two weeks on Friday as investors brushed off dismal jobs data from the US as progress in the US-China trade deal aided risk sentiment.
Negotiators from the US and China discussed the first phase of the trade deal in a phone call on Friday, with both countries agreeing to meet their obligations from the initial trade deal.
“The last thing global investors need right now amid the global coronavirus pandemic is a one-two punch from spiking trade war risks,” said FXTM market analyst Han Tan.
“However, the fact that investors are being compelled to monitor these uncertainties on two major fronts, set against a backdrop of a deep global recession, means safe-haven assets, such as gold and treasuries, remain well bid. There are enough potential downside risks still on the table, even without the injection of trade war uncertainties, that could trigger the unwinding of gains seen in risk assets since April.”
Shortly after the JSE closed, the Dow was up 1.59% to 24,254.38 points. In Europe, the FTSE 100 had added 1.4%, France’s CAC 40 1.06% and Germany’s DAX 30 1.41%.
US ECONOMY
US non-farm payroll data released on Friday showed that the US shed more than 20-million jobs in April as Covid19 weighed on the economy. The data is considered a crucial indicator of the health of the US economy.
“Wall Street did not learn anything new regarding the US labour situation, but one thing seems certain: price action is signalling that the majority of these job losses are expected to be short-lived,” said Oanda market analyst Edward Moya.
The JSE all share rose 1.97% to 51,003.58 points and the top 40 2.09%. Gold miners gained 4.74% and resources 2.57%.
At 5.51pm, the rand had firmed 1.33% to R18.3549/$, 1.07% to R19.9214/€ and 0.58% to R22.8294/£. The euro was up 0.25% to $1.0854.
The yield on the R2030 government bond fell 15 basis points to 9.29%. Bond yields move inversely to their prices. The National Treasury said on Friday that it would increase the value of bonds sold in the weekly auction by R1.57bn from May 19.
Gold was down 0.1% to $1,713.83/oz while platinum added 1.3% to $773.09. Brent crude rose 2.52% to $30.16.