International markets remain volatile as trade tension persists between China and the US. After China retaliated in the wake of a fresh round of tariffs imposed on the country early last week, US president Donald Trump instructed the US trade representative to consider an additional $100 billion in tariffs against Chinese products. However, in a subsequent statement, Trump said the US was still prepared to negotiate with China. Investors hope the two sides will be able to reach an agreement in the lengthy period it will take for the imposed tariffs to work their way through the US bureaucracy, and that these tit-for-tat levies are merely negotiating tactics.
The US nonfarm payrolls grew at a fewer than expected 103 000 in March, while the prior two-month total was revised lower by 50 000. The unemployment rate held steady at 4.1%, as wages grew at an annual 2.7% rate. The unexpectedly harsh winter weather may have contributed to the weaker pace of hiring. The latest report shows a record ninetieth straight monthly rise in payrolls.
Local markets recovered some of the previous week’s losses, with the JSE all-share index closing 0.88% higher. Major gainers were the industrial and resources sectors with a growth of 1.51% and 1.77% respectively. This was driven by a weaker rand. The SA currency lost 1.77% in value against the USD and 2.11% against the British pound.
The US markets closed in negative territory, with the S&P 500 losing 1.46%. In London, the FTSE gained 1.80%, while in Germany the DAX closed 0.96% higher. The CAC 40 in France also closed 1.76% higher.
In China, the Shanghai Composite Index lost 1.19% in value, a clear indication that US and Chinese markets are fearful of a trade war between the two super powers.
Brent crude oil traded lower at $67.03 per barrel.
This week, all eyes will be on Washington, hoping for a last-minute reprieve from US trade tariffs, as there can be no winners in a trade war between the world’s two largest economies.
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