File image: IOL

JOHANNESBURG - The rand rode the tailwinds of Moody’s reprieve yesterday as domestic bonds celebrated South Africa’s escape of junk status relegation according to NKC Research.

Moody’s decision came after the local market close on Friday, and played into our expectations for only an outlook downgrade despite a bombshell medium-term budget policy statement earlier that week. The rating agency stressed that the “development of a credible fiscal strategy” to stabilise metrics will be crucial to avoid negative downgrade action within the next months, with delivery of the February budget thought to present a pivotal junction in the credit rating roadmap. Meanwhile, trade optimism helped lift emerging market sentiment, from which the rand also benefited. At the close of local trade, the rand quoted 0.15 percent stronger at R14.80/$, after trading in range of R14.77/$ - R14.84/$. The rand traded flat overnight. Expected range today R14.70/$ - R15.00/$.

South African bourse

The JSE All Share (+0.49 percent) ended higher yesterday, on the back of improved emerging market sentiment. In local news, Shoprite (-1.50 percent) surrendered initial gains yesterday despite reporting a 7.3 percent increase in profits for the quarter ended September 2019. In the overall emerging market sphere, the MSCI Emerging Market Index (+1.46 percent) traded higher.

Brent crude oil

The Brent oil price traded on the front foot yesterday, thanks to growing optimism that Washington and Beijing may soon ink a trade deal. At the close of local trade, benchmark Brent crude futures quoted 2 percent higher at $62.62pb. Crude prices traded slightly lower during Asian trade this morning. 


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