JSE contends with higher Asian markets on Tuesday amid bond volatility

The JSE faces mostly higher Asian markets on Tuesday, even though US markets were under pressure overnight amid a hefty sell-off of global bonds.

Bonds have been under pressure as investors consider the prospect of rising inflation in the US, weighing on markets there.

Asian markets have largely shrugged this off, said Oanda senior market analyst Jeffrey Halley in a note, adding however, “financial markets have an every man for himself look about them today”.

The bond sell-off enjoyed a small reprieve overnight after European Central Bank president Christine Lagarde said the bank was “closely monitoring the evolution of longer-term nominal bond yields”, said National Australia Bank analyst Rodrigo Catril in a note.

This was a strong signal suggesting the bank is becoming uncomfortable with the current bond sell-off and it is prepared to intervene, he said.

In morning trade Japan’s Nikkei was up 0.46% and the Shanghai Composite 0.34%, while the Hang Seng had gained 1.48%.

Tencent, which gives direction to the JSE through Naspers, had gained 0.56%.

Gold was 0.15% higher at $1,811.81/oz while platinum had fallen 0.31% to $1,269.04. Brent crude was 0.7% higher at $66.26 a barrel.

The rand was 0.21% firmer at R14.62/$.

International focus will be on two days of testimony by US Federal Reserve chair Jerome Powell.

It is a busy day for corporate and economic releases on Tuesday, with unemployment data for the fourth quarter due later.

Global food services group Bidcorp is expected to report an up to 48% fall in headline earnings per share for its half-year to end-December, partly due to pressure in Europe as many countries there grappled with a second wave of Covid-19.

Infrastructure and mining group Aveng is due to report a net profit in its six months to end-December, saying in a recent trading update it had seen a better operating performance across its core and noncore businesses.

Kuma Iron Ore is expected to report an up to 44% rise in headline earnings per share in its year to end-December, benefiting from improved export prices and a weaker rand.

Imperial Logistics expects headline earnings per share to either be flat or fall slightly in its six months to end-December, saying it was still seeing Covid-19 related pressure.

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