The JSE was a little weaker on Friday, while the rand was mostly unchanged, as investors remained cautious, weighing the latest US jobs data and keeping a watchful eye on Middle East developments.
After a strong September, October has had a challenging start after escalating Middle East tension dampened investor sentiment, with the all share falling 1.42% for the week.
Israel has not yet followed through on its threat of retaliation against Iran’s missile strike as Western and regional leaders work to stabilise the situation, reported Bloomberg.
“Risk aversion remains intact as market participants sit and watch how the tension in the Middle East pans out,” said RMB head of forex execution Matete Thulare.
The nonfarm payrolls report released earlier in the day showed the US added far more jobs than expected in September, while the unemployment rate ticked down to 4.1%.
The nonfarm data follows reports this week which showed private sector hiring exceeded expectations in September, while weekly jobless claims rose slightly.
Friday’s payroll report is particularly important as it provides valuable insights into the health of the US labour market and the economy, and will influence the Federal Reserve’s rate-cutting strategy.
“A stronger-than-expected nonfarm jobs report has reshaped market expectations, reducing the likelihood of a large interest-rate cut by the Fed in the coming month,” said TreasuryONE currency strategist TreasuryONE director and head of market risk Wichard Cilliers.
“This unexpected boost in employment suggests that the US labour market remains resilient despite ongoing inflationary pressures and previous interest rate hikes. Strong job growth and lower unemployment have bolstered confidence in the US economy.”
The JSE all share lost 0.15% to 86,332 points — with major indices mixed, while the top 40 was down 0.25%.
At 5.50pm, the Dow Jones industrial average was 0.36% firmer at 42,160 points, with markets in Europe mixed.
The rand touched an intraday worst of R17.6022/$ — its weakest level in two weeks, as “investors flocked to the dollar as a safe-haven asset amid heightened global uncertainty, particularly surrounding escalating tension in the Middle East”, said Cilliers.
“With no clear resolution to the conflict in sight, the geopolitical risks will further fuel demand for the greenback, which is seen as a stable investment during periods of crisis,” he said.
At 6.05pm, the rand was little changed at R17.4937/$, while it had firmed 0.7% to R19.1621/€ and 0.11% to R22.9245/£. The euro was 0.71% weaker at $1.0953.
In commodity markets, gold lost 0.16% to $2,651.64/oz, while platinum added 0.25% to $996.41/oz. Brent crude was 1.25% firmer at $78.6 a barrel.
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