MONEY LIVE | Rand below R15/$ on Ukraine peace talk hopes -
The rand was trading around its best level in months on Friday as the continuation of peace talks - even as fighting still rages in Ukraine - has seen demand for safe havens like the dollar dry.
Traders stayed optimistic for an end to the war in Ukraine as talks continued between Moscow and Kyiv, although progress on Thursday was elusive. Sentiment also improved after Russia avoided default on dollar-denominated debt. The dollar headed for its first down week in six versus major peers on Friday, languishing near a one-week low, as investors also continued to assess the impact of the start of the Federal Reserve's rate tightening cycle this week.
The dollar index paused for breath on Friday, recovering slightly to 98.049 after declining every other day this week, and set for a 1.08% loss over the period. It slipped to 97.724 on Thursday for the first time since March 10. JPMorgan Chase & Co. processed funds for interest payments due on Russian government dollar bonds, easing some fears of a default. Oil extended a surge after the Kremlin cast doubt on how much progress ongoing cease-fire talks are making.
At the same time, the continued fighting and tightening Federal Reserve monetary policy point to the likelihood of more cross-asset swings ahead.“I don’t necessarily expect the rest of the year to be that easy,” Lori Calvasina, head of U.S. equity strategy at RBC Capital Markets LLC, said on Bloomberg Television.
U.S. lawmakers voted to end regular trade ties with Russia, paving the way for sharply higher tariffs on Russian goods. Altron Documents Solutions also distributes Duplo finishing equipment and Fujifilm inkjet production machines in the local market. The latest reading is well below the average consumer-confidence reading of 2 since 1994, signaling a low willingness to spend or increased caution among consumers, FNB said. The slump in the index was largely driven by declines in the economic outlook and household financial position of high-income households that earn more than R20 000 a month, it said.
While affluent consumers were the first to become alarmed about South Africa’s economic prospects and downwardly revise the outlook for their household finances, the less affluent will eventually have to make the largest adjustments to their budgets, she said. But the group said that while customer volumes grew strongly in the first half of the year, momentum slowed in the second half due to supply chain disruptions to vehicle production in South Africa.
Stocks jumped Thursday, with Chinese technology shares soaring again as traders digested the Federal Reserve’s view that the U.S. economy is strong enough to weather the campaign against high inflation now underway. Treasuries advanced, while a portion of the bond curve -- the gap between five- and 10-year yields -- inverted for the first time since March 2020. For some, the latter highlights a growing risk that the Fed’s efforts to rein in inflation could trigger an economic downturn.
“The issue there is, can you soft-land this thing? Historically, when the Fed tightens, you do get some hard landing somewhere.” Crude prices steadied following Tuesday's plunge, as the International Energy Agency cut its world oil demand forecast for 2022 but warned that sanctions against Russia over its invasion of Ukraine could spark a global supply"shock".The Federal Reserve was Wednesday set to raise US interest rates to fight decades-high inflation, with the dollar down against rivals on the widely-expected move.
The JSE's All Share index was up almost 4%, with Naspers and Prosus rallying around 19% after Tencent jumped 23% in Hong Kong. ICT firm Bytes increased 11% following a trading update, while RMI rose 9%.Elsewhere, oil prices steadied after slumping under $100 per barrel Tuesday.Measured in real terms, retail trade sales increased by 7.7% in January 2022, compared to the same month in 2021.
However, its gross profit margin declined from 24% to 23%, which Libstar attributed to lower export margins and the rising costs of raw materials and packaging due to the local and international supply chain challenges. "Revenues would have been higher if not for the global semiconductor shortages and ongoing supply chain constraints," the company said.
Growth is said to have accelerated in the second half of the year. The company also expects to report a"robust" increase in invoiced income when it posts its preliminary results for the financial year on 24 May. The Hang Seng China Enterprises Index jumped as much as 12% on Wednesday, its biggest gain since the global financial crisis, while a gauge of Chinese tech firms listed in Hong Kong soared by a record 20%. China’s benchmark CSI 300 Index advanced by 4%. Some of the most beaten down stocks like Alibaba and Tencent gained more than 20%.
”Even with the latest bounce, some market watchers say it’s too early to call an end to the rout. JPMorgan Chase & Co. earlier this week labeled some Chinese internet names as “uninvestable” in the short term. Meanwhile, short sell turnover in Hong Kong shares accounted for more than 20% of total equity trading on Monday, the highest since late January, according to data compiled by Bloomberg.
In the latest development to whipsaw markets, Putin told European Council President Charles Michel that Ukraine “is not showing a serious attitude toward finding mutually acceptable solutions” in talks with Moscow on ending the fighting, the Kremlin said. In its monthly report, the cartel took an unusual step in acknowledging that the war threatens to intensify the surge in global inflation. UK Prime Minister Boris Johnson is expected to travel to the United Arab Emirates and Saudi Arabia this week in a push for more oil.
The gap between bids and offers for WTI was six cents at times on Tuesday - it would usually only be about half that amount - another sign of a less active market.
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