Bianca Botes, Corporate Treasury Manager at Peregrine Treasury Solutions says emerging markets are basking in the afterglow of a weaker dollar and slowing global growth.

"While the developed world is taking active steps to counter the slowdown in global growth, market sentiment has returned to emerging markets with a significant uptick in volume in both the equity and currency space."

By 11:06, the rand was changing hands at R13.27 to the greenback.

"The World Bank, along with the IMF, has recently voiced concerns about global growth, while both the ECB and the Fed have echoed these concerns. It was only a year ago that the Fed took an aggressive stance on US interest rates to counter inflation, yet the picture looks quite different now.

"On Wednesday evening, Federal Reserve chair Jerome Powell voiced concerns that the slowdown in US growth could even see the country enter a recession in 2020. He went on to say that the Fed’s current hiking cycle is over for now given that inflation is within range and the bigger picture of the US economy needs to be considered.

"A slowdown in the EU as well as China has also been the status quo in recent months, with Italy entering a recession, while manufacturing and GDP data from China have both dropped. While global growth slowdowns are a concern for the entire world economy, there is a silver lining: as sentiment in developed markets dwindles, investment and trade activity are being redirected to higher-yield environments such as South Africa.

"The rand celebrated the Fed’s move, gaining just over 2.5% during the week, extending its strengthening trend since the beginning of 2019. However, when it comes to the local economy and the local currency, significant risks still exist.

"The strength currently seen in the currency is mostly driven by weakness in major currencies such as the GBP and USD, and not because there has been a significant change in the outlook of the South African economic landscape. The JSE saw volumes topping R30bn yesterday, after a slow 2018, reaffirming the return of sentiment to the EM space.

"Data from the US this week saw the pending home sales drop by 2.2% m-o-m in December while jobless claims for the week accelerated to 253k from the previous 200k.

"Brexit is still the main focus in the EU and UK, with Brussels making it clear that no changes will be made to the current agreement, after the UK parliament voted on Tuesday to amend the Brexit treaty.

"Locally PPI contracted to 5.2% in December from the previous 6.8% while trade balance improved to a R17.17bn surplus in December from R3.29 bn. Attention will turn to the new vehicle sales and manufacturing PMI due for release today.

"The week ahead will see the monitoring of China-US trade relations and Brexit remain centre stage, while local politics will become more pertinent as we move closer to the election period.The rand is standing tall against the greenback with an intra-day range of R13.22 to R13.38 expected."

ArcelorMittal SA is finalising its preliminary reviewed condensed consolidated financial statements for the year ended 31 December 2018.

It expects its loss per share to improve from R4.69 cents per share to a profit within a range of R1.20 and R1.30 per share (126% and 128% change) when compared to the prior year.

The profit per share includes a profit on the sale of ArcelorMittal South Africas investment in Macsteel International Holdings BV.

The financial information on which this trading statement is based has not been reviewed or audited by the companys external auditors.

The rand opened Friday at R13.25/$ — more than 30c stronger than where it started the week.

With the currency pair flirting with the possibility of R13.22, which is not inconceivable if the euro/$ breaches 1.15. Yet, caution is warranted as geopolitical risks are still ostensible: little is known of the progress of ongoing US-China trade talks and the EU Commission is standing resolute on the Irish backstop provision. This should keep $/rand contained to its current trading range. -RMB

Asian markets mixed as China, US agree to further trade talks

After the much-anticipated gathering, Donald Trump hailed "tremendous progress" between the world's top two economies but warned the "hard deadline" of March 1 remained in place, after which US tariffs on billions of dollars of Chinese goods will be imposed.

For its part, Beijing said they held "candid, specific and fruitful" discussions and had agreed to increase cooperation on intellectual property - a major source of White House anger with China - and boost imports of US goods. - AFP