Signs of Ongoing Supply Tightness Keep Markets on Edge

  • Market Overview

In Tuesday’s trading session in the local markets, the Top 40 closed the day up 0.5%. The Resources 10 sector went up by 0.5%, the Financial 15 went up 0.14%, the Industrial 25 went up by 0.68% and lastly the South African Listed Property index was up by 0.21%. The rand traded at R15.92 against the United State Dollar, R19.54 against the Great British pound , and R16.78 against the Euro . This morning, the local CPI numbers are expected to be released at 10:00.

Figure 1: Kumba Iron Ore’s intraday share price action
Kumba Iron Ore’s intraday share price action

On the commodities front, the Brent Crude oil is trading at $109.22 a barrel and WTI Crude oil is traded at $103.74 a barrel. Gold Spot price is currently trading at $1827.15. Platinum Spot is now trading at $931 and lastly, Palladium Spot price is at $1861.30. On the oil front, concerns that rising US interest rates aimed at curbing soaring inflation would cause a demand slowdown. US President Joe Biden is set to meet with seven large oil companies this week amid a campaign to drive down fuel prices. Meanwhile, signs of ongoing supply tightness kept markets on edge, with Exxon Mobil (NYSE: XOM ) and Vitol warning that demand is still on the road to recovery to pre-pandemic levels and supply is expected to lag demand growth.

Across the globe, the S&P 500 closed the day up 2.45%, Dow Jones closed the day up 2.15% and the Nasdaq had a 2.49% climb. The FTSE 100 closed up 0.42% and the DAX was up 0.2% and CAC40 was up 0.75%. In the Asian markets, the Nikkei 225 is currently down 0.37% and the Hang Seng is currently down 2.33%. In the United States, Federal Reserve Chair Jerome Powell is set to testify before Congress today at15:30 and Thursday. The annual inflation rate in the UK increased to 9.1% in May of 2021 from 9% in the previous month, the highest since 1982. China’s central bank paused its policy easing and left its benchmark lending rates unchanged on Monday to avoid further divergence in monetary policy against other economies.

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