The JSE tracked firmer global markets on Monday, building on Friday’s gains, while markets await an address by US Federal Reserve chair Jerome Powell and key data from the US this week.
Focus remains firmly on inflation and the effects any further tightening of monetary policy will have on global growth. Investors will pay close attention to Powell, who is due to testify before Congress on Tuesday and Wednesday, while the non-farm payroll data is due on Friday.
Market participants see Powell’s address as an ideal opportunity to set out how the Fed’s analysis has been changed by the recent string of strong data and will be looking for clues on how the central bank will approach its next rate-hike decision.
The ten-year US Treasury note — which has been trading in line with the two-year in recent months — has seen its yield rise in the past few weeks. But in the last few trading sessions, it has remained below its 2023 peak of just over 4%, said SPI Asset Management managing partner Stephen Innes. “That’s helping keep traders bidding for stocks a bit Monday, with positive corporate news today giving the overall market a boost.”
Innes said gains in stocks were being limited by concerns about global growth after Chinese leaders set a lower-than-expected 5% GDP target for the country this year, “which implies China is unlikely to add large-scale stimulus to boost economic growth.”
The JSE gained 0.52% to 78,697 points and the top 40 added 0.62%. Industrials added 1.73%, banks firmed 1.17%, financials collected 0.94% and retailers advanced 0.6%. The industrial metals and mining index lost 3.43%, resources shed 2.33%, food producers declined 1.16% and precious metals fell 0.66%.
At 6.20pm, the Dow Jones industrial average was 0.31% firmer , while France’s CAC 40 had added 0.4% and Germany’s DAX gained 0.53%.
Meanwhile, analysts expect the US payrolls on Friday to show job growth normalising after January’s blowout figure.
“The consensus is for a 215,000 headline number, with the unemployment rate stable at 3.4%,” said RMB head of forex execution Matete Thulare.
“A figure at or below consensus would come as a huge relief to stressed financial markets, but a strong figure might send the dollar surging again,” Thulare.
At 6.18pm, the rand had weakened 0.49% to R18.2340/$, 0.88% to R19.4725/€ and 0.54% to R21.9386/£. The euro was 0.47% firmer at $1.0684.
Gold lost 0.24% to $1,850.40/oz, while platinum gained 0.2% to $975.40/oz. Brent crude was 0.16% weaker at $85.79 a barrel.
Would you like to comment on this article?
Sign up (it's quick and free) or sign in now.
Please read our Comment Policy before commenting.