The JSE was on track for its second day of losses on Wednesday morning, with global markets under pressure as caution prevails ahead of the US Federal Reserve’s policy announcement later on Wednesday.
Markets are set for another volatile session with traders awaiting more clues about whether the Fed will be able to pull off a soft landing that brings down inflation without triggering a recession.
The Fed is widely expected to raise rates 50 basis points and announce a balance-sheet runoff, with surging fuel and food costs prompting a recent hawkish shift from the world’s most influential central bank. The announcement will be at 8pm SA time, well after local markets close.
“Whether the Fed hikes by 50 basis points or not has been analysed to death. The crux will be the statement and the Fed’s forward guidance on the path of interest rates,” said Oanda senior market analyst Jeffrey Halley.
“Investors looking for any changes to the Fed's future rate-hiking trajectory in federal open market committee statement after the announcement,” said Halley
At 10.25am, the JSE all share had lost 0.63% to 70,888.22 points and the top 40 0.69%. Industrial metals had fallen 1.42%, resources 0.72%, industrial 0.7%, financials 0.23% and banks 0.15%.
At the same time, London’s FTSE had lost 0.34%, France’s CAC 40 0.24% and Germany’s DAX 0.12%.
Earlier in Asia, Hong Kong’s Hang Seng fell 1.14%. The Shanghai Composite and Japan’s Nikkei were closed.
At 9.57am, the rand had weakened 0.4% to R15.8498/$, 0.39% to R16.6780/€ and 0.67% to R19.8275/£. The euro was little changed at $1.0529.
In morning trade, the yield on the R2030 was little changed at 9.9%. Bond yields move inversely to prices.
Gold gained 0.1% to $1,869.88/oz and platinum 1.02% to $976/oz. Brent crude was 2.62% firmer at $108.45 a barrel.
With Karl Gernetzky
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