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The JSE looks set to benefit from generally positive sentiment on Friday morning, with all eyes on the US nonfarm payrolls report later.

The US ADP private payrolls report massively undershot expectations on Thursday, with employers only adding 128,000 jobs in May, compared to the 300,000 expected in the market.

In spite of this, US markets gained, with the tech-heavy Nasdaq rising almost 2.7%.

The only possible driver seemed to be the ‘bad news is good news’ story, but importantly the other side of that equation is that a mooted pause by the US Federal Reserve in its hiking cycle is now less likely, with yet another official saying that he could not see the case for one later in the year, said National Australia Bank economics director Tapas Strickland in a note.

Instead, the question for the Fed is really about the pace after July rather than pausing, he said.

Markets expect the Fed to deliver interest rate increases in July and September, and there are hopes in the market that this will be enough to rein in inflation.

The highly anticipated meeting of oil cartel Opec on Thursday however turned out to be a damp squib, said Oanda senior market analyst Jeffrey Halley in a note.

There was agreement to increase output in July and August to 648,000 barrels per day from the previously agreed 432,000, but given most of Opec can’t even meet their present targets, the entire exercise was nothing more than window dressing, he said.

Brent crude had gained 2.77% on Thursday, but in morning trade on Friday it was 0.67% lower at $117.38 a barrel, having risen almost 9% over the past month.

In morning trade Japan’s Nikkei was up 1.09% and Australia’s All Ordinaries index 0.8%. Markets in China are closed on Friday for the Dragon Boat festival.

Gold and platinum were little changed at $1,868.16/oz and $1,023/oz respectively.

The rand was flat at R15.45/$, having gained 0.68% on Thursday.

The local corporate and economic calendars are bare on Friday, while US nonfarm numbers are due at 2.15pm SA time, with the economists expecting 325,000 jobs to be added.



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