The rand reacted violently to the speech, immediately shedding 20 cents and weakening from R14.60/$ to R14.80/$, while bond markets also saw a sell-off. Photo: Pixabay

JOHANNESBURG - The South African currency garnered support from external conditions while lingering tailwinds of ratings reprieve over the weekend sheltered the local unit from negative domestic news. 

Emerging market sentiment was buoyed by optimism on US-Sino trade progress, providing reprieve to the local unit in the face of negative domestic releases. Private sector activity contracted for a sixth consecutive month in October amid declines in output and new orders. The PMI index came in at 49.4 from 49.2 in September, still below the 50-threshold as operating conditions were undermined by power capacity constraints. Also on Tuesday, Moody’s cut Eskom’s credit rating further into junk territory (one notch to B3). At the close of local trade, the rand quoted 0.32 percent stronger at R14.73/$, after trading in range of R14.69/$ - R14.78/$. Expected range today R14.60/$ - R14.90/$.

South African bourse

The JSE All Share (+0.56 percent) benefited from improved emerging market sentiment as stocks rose across the board. Prominent gold mining (-5.55 percent) shares that include the likes of AngloGold (-7.03 percent), Harmony Gold (-5.34 percent) and Gold Fields (-5.16 percent) were pressured by weaker precious metal prices. In the overall emerging market sphere, the MSCI Emerging Market Index (+0.63 percent) traded higher.

Brent crude oil

The Brent oil price extended gains yesterday, buoyed by prospects of a US-China trade agreement and hopes that Washington could remove previously-imposed tariffs on Chinese goods. At the close of local trade, benchmark Brent crude futures quoted 0.9 percent higher at $62.73pb. Crude prices traded weaker during Asian trade this morning. 

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