The JSE faces sharply weaker Asian markets on Friday morning, amid concerns over US-China relations and rising Covid-19 numbers in the US.

US jobless claims rose last week, leading to rising gloom regarding a recovery in the world’s largest economy, as some of the most populous states reintroduce Covid-19 lockdown measures.

Cases are rising rapidly in SA too, and President Cyril Ramaphosa announced on Thursday night schools will be closed until the end of August.

The US has ordered the closure of China’s consulate in Houston, Texas, this week, and a response from Beijing is expected. US secretary of state Mike Pompeo delivered a speech on Thursday in which he called for countries to adopt a more aggressive stance against China.

In morning trade on Friday the Shanghai Composite was down 2% and the Hang Seng 2.25%.

Tencent, which usually gives direction to the JSE via Naspers, its biggest shareholder, had slumped 4%.

Gold was up 0.18% to $1,889.79/oz while platinum was down 0.4% to $911.85/oz. Brent crude was up 0.32% to $43.45 a barrel, having slipped 2.19% on Thursday.

The rand was 0.27% at R16.67/$, having weakened 1% on Thursday, when the Reserve Bank cut the repo rate by 25 basis points, its fifth cut so far in 2020.

There is little on the domestic corporate or economic calendar on Friday, while international focus remains on US-China tensions and Covid-19 numbers.

Covid-19 remains a huge concern in the US, and US-China relations “appear to be deteriorating at an exponential pace,” said Oanda senior market analyst Jeffrey Halley in a note.


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