The JSE closed firmer on Tuesday as global equity markets reopened after the Easter long weekend, with investors mulling over Friday’s benign US jobs report and preparing for inflation data.
Consumer and producer prices for March — due on Wednesday and Thursday, respectively — will provide insight on the pace and direction of interest rates in the world’s biggest and most influential economy.
On Friday the jobs report from the US Bureau of Labor Statistics pointed to a resilient economy and moderate inflation, after signs of weakening in the labour market earlier in the week.
Non-farm payrolls grew by 236,000 for the month, slightly lower than the market estimate of 238,000, while the unemployment rate fell to 3.5%, beating expectations that it would remain steady at 3.6%.
“Traders have continued to increase the odds of the Fed hiking rates at the May Federal Open Market Committee (FOMC) meeting after Friday’s non-farm payrolls data, with contracts covering the meeting pricing in around a 70% chance of a quarter-point increase,” said RMB market macroeconomist Siobhan Redford.
“Pricing of the first full rate cut, meanwhile, has been pushed out to November from September, with traders having dialled back the number of cuts for the year from as many as four just a few weeks ago to just one now, with another expected in January 2024.”
The JSE all share gained 1.14% to 77,990 points and the top 40 added 1.22%. European markets also ended the session higher, with London’s FTSE 100, France’s CAC 40 and Germany’s DAX gaining 0.57%, 0.89%, and 0.37%, respectively.
At 6.33pm, the Dow Jones industrial average was 0.48% firmer at 33,747.24 points and the S&P 500 had gained 0.19%.
Investors will also be keeping an eye on the first batch first-quarter earnings in light of the prevailing climate of high inflation and rising interest rates. The big banks, including JPMorgan and Wells Fargo, are scheduled to report on Friday.
The rand held steady after the US jobs report “easing some of the US recession fears evident early last week,” said Matete Thulare, head of forex execution at RMB. “The rand has sharply underperformed, without any apparent reason, suggesting a recovery is due,” Thulare added.
At 6pm, the rand had strengthened 0.62% to R18.3816/$, 0.19% to R20.0347/€ and 0.34% to R22.8124/£. The euro was 0.42% firmer at $1.0905.
Gold gained 0.71% to $2,003.97/oz and platinum was up 0.97% to $1,001.08/oz. Brent crude was 1.26% firmer at $85.35 a barrel.
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