Optimism over the US-China trade war lifted Asian markets on Friday, and looks set to boost the JSE as well, while early results indicate a  victory for the Conservative Party in the UK election.

Risk-on trade was evident across global markets. The rand was 0.37% firmer at R14.4399/$ on Friday morning, its best level in four months.

US President Donald Trump tweeted on Thursday that the US and China were close to a “big” deal, helping to assuage market concerns over an escalation in the conflict as a Sunday deadline for new tariffs looms.

US markets were boosted on Thursday, with Asian markets following suit on Friday morning. Reports have suggested that a partial deal has been reached, the details of which would be released later on Friday.

The impact of the tweet on currency markets was more muted, and has actually supported the dollar, with reduced tariffs seen to be positive for the economy, said National Australia Bank analyst Rodrigo Catril in a note.

The spotlight is on the UK election, where the Conservative Party looks set for a large majority, boosting the pound more than 2% against the rand and the dollar.

Analysts have noted that a hung parliament would have increased uncertainty, and weighed on sterling.

In morning trade Hong Kong’s Hang Seng was up 2.06%, while the Shanghai Composite had added 1.24%.

Gold was down 0.16% to $1,467.38/oz and platinum had slipped 0.7% to $936.29. Brent crude was up 0.44% to $64.62 a barrel.

Tencent had added 2.46% in Hong Kong, boding well for Naspers, which is the largest shareholder of the WeChat owner.

The corporate calendar is bare on Friday, although The Reserve Bank’s quarterly bulletin for the third quarter is due later.

“We suspect that household balance sheets are likely to have deteriorated further. To this end, we will be paying close attention to disposable income growth, net wealth, household debt and debt servicing costs,” FNB economists said in their week-ahead note.


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