MARKETS WRAP

RAND HITS 11-WEEK HIGH, JSE UP

THE RAND raced to an 11-week high against the dollar on Friday, supported by a risk rally as an unexpected fall in the US unemployment rate brought back hopes of a swift economic recovery.

Stocks rose along with global markets as investors priced in an economic recovery following the shock of the coronavirus pandemic.

At 5pm, the rand was trading at R16.86 to the dollar, 0.3 percent firmer than its previous close, after hitting R16.7330 earlier in the session — its strongest since March 18.

The US economy unexpectedly added jobs in May after suffering record losses in May, offering the clearest signal yet that the downturn was probably over.

The risk rally was also supported by new monetary stimulus for Europe.

“The sheer size of the monetary and fiscal support measures out of the developed world in light of the coronavirus shock has driven a risk-on frenzy as a global search for yield has led to financial spillovers into the emerging market space,” said economists at ETM Analytics.

“Technically, the (R)16.85 handle remains the line in the sand for the USD-ZAR, with the pair hovering around this level all morning. A sustained break below this level is likely to see a slide to (R)16.6500,” ETM analysts said in a note.

The JSE all share index advanced 2.85 percent to 54 722.38 points, while the Top40 index gained 2.79 percent to 50 199.80 points.

Banking shares were among the gainers up 6.57 percent with up 9.18 percent to R126.10

6.22 percent

Standard Bank

Nedbank

and stronger to R119.73.

Bonds weakened, with the yield on the 10-year government issue adding 20.5 basis points to 8.945 percent. I Reuters.