The rand continued its upward trajectory on Monday, building on gains from the previous session, while the JSE strengthened despite mixed global markets as investors anticipated key developments. After nearing its weakest level in three months due to uncertainty surrounding President-elect Donald Trump's policies, the rand rebounded, hitting an intraday high of R18/$. This recovery was supported by an improved outlook for South Africa’s credit rating. The focus this week shifts to the Reserve Bank, with its Monetary Policy Committee (MPC) expected to announce an interest rate decision on Thursday. Market consensus points to a 25 basis points (bps) cut to 7.75%, following a similar reduction in September.
In the US, stock markets closed mixed on Monday. The S&P 500 and Nasdaq rose 0.40% and 0.60%, respectively, while the Dow Jones fell by 55 points. The tech sector led the recovery after a challenging week, with Tesla (NASDAQ:TSLA) jumping 5.60% amid reports that Trump’s team is considering easing regulations for self-driving vehicles, which boosted the Nasdaq. Investors are now looking to Nvidia’s earnings report on Wednesday for insights into demand for its Blackwell AI chips, though Nvidia’s shares slipped 1.30% following reports of overheating issues in server-connected chips.
WTI crude oil prices surged 3% to $69 per barrel on Monday, driven by growing supply concerns. Production at Norway’s Johan Sverdrup oilfield, the largest in Western Europe, was halted due to a power outage. The price rise was further fuelled by escalating tensions in the Russia-Ukraine war, as the Biden administration approved Ukraine’s use of US weaponry for strikes deep into Russian territory.
In Europe, markets ended Monday on a subdued note, with the Stoxx 50 dipping 0.20% and the Stoxx 600 declining 0.10%. Sector performance was mixed, with retail stocks down 0.90%, while mining stocks rose 0.60%. Investors remained cautious ahead of key economic data releases, including wage growth, flash PMIs, and final Eurozone inflation figures, which are expected to provide insight into the region's economic conditions.
Asian markets saw varied outcomes. The Hang Seng climbed 0.80%, snapping a six-session losing streak after China urged listed companies to boost share prices through measures like mergers, stock schemes, dividends, and buybacks. However, gains were tempered by Morgan Stanley’s downgrade of Hong Kong shares to "underweight." Meanwhile, Japan’s Nikkei fell 1.09%, mirroring Wall Street’s declines as concerns about slower US Federal Reserve rate cuts dampened investor sentiment.
