The JSE closed slightly firmer on Tuesday while its global peers were mixed ahead of scheduled remarks from several US Federal Reserve officials.
In prepared remarks delivered on Tuesday, Fed Governor Christopher Waller said he was “increasingly confident that policy is currently well positioned to slow the economy and get inflation back to 2%”.
Waller, who has established himself as one of the most hawkish officials on the Federal Open Market Committee, delivered the strongest signal yet that further monetary tightening might not be necessary, given clear signs the US economy is slowing sufficiently to bring inflation fully under control, the Financial Times reported.
Among those expected to deliver further commentary are Chicago Fed president Austan Goolsbee and Fed board governor Michelle Bowman.
Investors are also awaiting the release of the October personal consumption expenditures (PCE) price index — the value of the goods and services purchased by, or on the behalf of residents in the US — which is scheduled for release on Thursday.
More signs of inflation falling will increase investors’ confidence that the Fed is done hiking rates, and increase bets that the central bank’s policymakers will begin cutting rates in 2024.
The CME FedWatch Tool is pricing almost 100% odds that the Fed will keep rates unchanged to the end of May 2024, while Fed funds futures indicate markets expect at least three 25-basis point cuts next year.
The PCE price index, the Fed’s preferred gauge of inflation, will be followed by a public appearance by chair Jerome Powell at Spelman College in Atlanta on Friday, where investors are hoping to get more clues on prices and interest rates.
“Markets are getting more convinced that the Fed is done with interest rate hikes,” said TreasuryOne currency strategist Andre Cilliers.
“Upcoming data and comments from Fed officials will be closely watched, with any signs of a slowdown in the US economy and labour market likely to see bets of earlier rate cuts next year rise and the greenback come under increased pressure,” added Cilliers.
The JSE all share gained 0.29% to 75,589 points and the top 40 added 0.3%.
At 6.59pm, the Dow Jones industrial average was 0.49% firmer at 35,507.61 points, while markets were mixed in Europe.
The rand held steady for most of the session, touching an intraday best of R18.5848/$. At 6.40pm, it was 0.13% firmer R18.6317/$, though it had weakened 0.2% to R20.4781/€ and 0.24% to R23.6455/£. The euro was 0.35% stronger at $1.0991.
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