JOHANNESBURG - The South African rand took advantage of a soft dollar to advance to its best levels since mid-March during the European session, although ongoing US-Sino trade tensions weighed on risk appetite according to NKC Research.
While the South African economic calendar is fairly light this week, the May jobs report will be the focus point of this week’s US calendar. Following a cumulative 21.4 million job loss in March and April, we expect nonfarm payrolls will decline by 6.4 million in May as the unemployment rate rises to 20.7 percent and the participation rate drops below 60 percent. Downward revisions to prior months will likely push the cumulative job loss towards 30 million – three times the GFC loss in 2008-09. At the close of local trade, the rand quoted 1.58 percent stronger at R17.10/$, after trading in range of R17.10/$ - R17.47/$. The rand traded firmer overnight. Expected range today R16.90/$ - R17.25/$.
South African bourse
The JSE All Share (+3.08 percent) joined a global stock market rally yesterday, which was driven by economic recovery hopes. Large financial stocks benefited from a stronger rand. In the overall emerging market sphere, the MSCI Emerging Market Index (+1.68 percent) traded higher.
Brent crude oil
The Brent oil price was lifted by expectations of supply cuts. Opec+ are considering deepening production cuts by 9.7 million bpd when the group of oil producers convenes for an online meeting later this week. At the close of local trade, benchmark Brent crude futures quoted 1.30 percent firmer at $39.08pb. Crude prices ticked higher during Asian trade.