JOHANNESBURG - The South African currency rallied as a constructive global growth recovery narrative fuelled risk appetite according to NKC Research.
US-Sino tension concerns were offset by optimism as more economies signalled intent to loosen lockdown restrictions. That said, the pain inflicted by the pandemic will leave a deep cut on growth. Our projection of a 7.2 percent contraction this year remains susceptible to downside revision, but we expect measures aimed at supporting the economy to gain impetus once hard data reflects the extent of economic hardship. Containment efforts have taken precedence over economic considerations as South Africa enforced one of the harshest lockdown restrictions on the continent, but we expect that a reprioritising of policy will follow closely on the heels of the first harsh hard data releases. At the close of local trade, the rand quoted 0.81 percent stronger at R17.36/$, after trading in range of R17.36/$ - R17.65/$. The rand traded sideways overnight. Expected range today R17.25/$ - R17.60/$.
South African bourse
The JSE All Share (+1.06 percent) tracked global stock markets higher yesterday, led by gains in large financial stocks (+5.75 percent). In the overall emerging market sphere, the MSCI Emerging Maket Index (+1.67 percent) traded on the front foot.
Brent crude oil
The Brent oil price surrendered initial gains late on Tuesday afternoon due to tensions in Hong Kong and demand concerns. At the close of local trade, benchmark Brent crude futures quoted 0.58 percent weaker at $35.98pb. Crude prices recovered during Asian trade this morning.
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