JOHANNESBURG - The South African currency traded sideways on Thursday, holding onto the notable gains made on Tuesday according to NKC Research.
With little in the way of data releases the domestic news feed centred around President Cyril Ramaphosa’s televised speech Thursday evening.
With Covid-19 cases flaring up in the Western and Eastern Cape, the president announced stricter containment measures for the Nelson Mandela Bay Metro.
The national state of disaster has been extended until 15 January 2021. The tighter lockdown restrictions are not as severe as previous measures, and do not cover all geographies within the country.
At the close of local trade, the rand quoted slightly stronger at R15.19/$, after trading in range of R15.18/$ - R15.37/$.
The local unit inched firmer overnight, seemingly unfazed by stricter lockdown measures. Expected range today R15.00/$ - R15.45/$.
South African bourse
The JSE All Share (+1.1 percent) ended higher yesterday, buoyed by a 2.1 percent rise in large resource stocks. In the overall emerging market sphere, the MSCI Emerging Market Index (+0.9 percent) traded firmer.
As earnings recover, some equity markets have far greater room to catch-up than others. The broader MSCI All Country World index’s trailing earnings per share is currently around 15 percent below its 10-year real trend, but this masks a wide variation at the individual market level. Earnings are actually back to slightly above their trend in China and are only 10 percent lower than their trend in the US.
But in parts of Europe and in Latin America, earnings are very depressed, over 30 percent below their 10-year trend. Of course, these pre-crisis trends are unlikely to be regained given the likelihood of long-term economic scarring from Covid-19.
Brent crude oil
OPEC and Russia have agreed to increase oil production from January 2021 by only 500,000 bpd, versus the 2 million bpd agreed initially. OPEC+ said it will meet on a monthly basis to review conditions. Crude prices traded stronger during Asian trade this morning.
BUSINESS REPORT ONLINE