The JSE tracked global peers firmer on Thursday as the European Central Bank (ECB) maintained its interest rates and three major US banks reported positive earnings results.
The ECB kept its monetary policy unchanged as expected on Thursday, but confirmed it will end its bond-buying programme in the third quarter as it seeks to balance inflation — which reached a record 7.5% in March — with a weakening economic outlook due to the war in Ukraine that has fuelled higher energy prices and supply chain bottlenecks.
“There’ve been a number of interest rate hikes this week, some more expected than others, and the ECB has instead opted for the usual cocktail of unhelpful ambiguity,” said Oanda senior market analyst Craig Erlam. “Anyone hoping for a hawkish hint ahead of its next meeting and forecasts, will no doubt be very disappointed, albeit not surprised,” he added.
“There is nothing of substance to take away from today’s [Thursday’s ECB] meeting and I can’t help but think the market remains far too ambitious in its interest rate expectations this year for a central bank that still thinks bond purchases are warranted,” Erlam said.
US banks including Goldman Sachs, Morgan Stanley and Citigroup posted positive earning results for the first quarter.
“Positive earnings gave markets a bit of a boost as investors monitor how banks weathered surging inflation and a recession warning from the bond market in the form of the flattening yield curve,” Erlam said.
The JSE broke a three-day losing streak, with the all share gaining 0.35% to 73,382.83 points, while the top 40 added 0.43%. The all share is down 1.86% for the week, with the losses mainly coming from banks and financials, which were down 4.77% and 4.14%, respectively. Markets are closed tomorrow and on Monday for the Easter holidays.
At 6.06pm, the Dow Jones industrial average was 0.11% firmer at 34,604.11 points, while the broader S&P 500 was down 0.57%. In Europe, London’s FTSE closed 0.47% higher, while France’s CAC 40 and Germany’s DAX added 0.72% and 0.62%, respectively.
The rand weakened with other emerging-market currencies, reaching an intraday low of R14.7466/$. At 5.50pm, it was 0.79% softer at to R14.6797/$ and 0.19% to R19.1555/£, while it had strengthened 0.16% to R15.8365/€. The euro weakened 1% to $1.0788.
The yield on the R2030 bond rose six basis points to 9.77% as prices for the securities fell.
Gold was 0.45% weaker at $1,968.88/oz and platinum 0.76% at $983.50. Brent crude eased 0.74% to $107.47 a barrel.
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