The JSE was marginally down on Friday morning, while global markets were mixed as investors considered Federal Reserve chair Jerome Powell’s comments, while awaiting key jobs report in the US.
In his testimony to the Senate’s banking committee on Thursday, Powell said the central bank was “not far” from delivering cuts to interest rates; however, the policymakers needed to see additional data confirming inflation was cooling.
He said that if conditions continued as expected, including a strong job market and cooling inflation, cuts would come later in 2024. Powell added that cutting rates too early could risk a reacceleration of inflation.
Powell's comments came before the closely watched nonfarm payrolls report due to be released on Friday afternoon. Investors will be assessing the numbers for insights into the state of the labour market, which has shown resilience despite higher interest rates.
Analysts are forecasting 200,000 new jobs to have been created in the month compared to January’s 353,000. The overall unemployment rate is expected to remain at 3.7%.
The hope among traders is that the job market remains healthy but not so much that it deters the Fed from cutting interest rates, reported Bloomberg.
“Although Powell reiterated the same tune the Fed has been singing in the past few months, the market has re-adjusted its stance on Fed cuts for later this year. However, he did mention that they are gaining more confidence that inflation is currently on the trajectory of moving closer to the 2% mark,” TreasuryOne currency strategist Andre Cilliers said.
“All eyes will be on this afternoon’s Payroll data in the US, and it will provide direction for the markets.”
At 10.30am, the JSE all share had lost 0.24% to 73,430.71 points and the top 40 had fallen 0.3%. Retailers had gained 1.62%, food producers 0.55%, banks 0.2% and financials 0.11%. Industrial metals had lost 0.69%, resources 0.56%, precious metals 0.32%, industrials 0.29% and SA listed property 0.1%.
At the same time in Europe, France’s CAC 40 was down 0.1% and Germany’s DAX 0.19%.
Earlier in Asia, the Shanghai Composite added 0.61%, Hong Kong’s Hang Seng 0.89% and Japan’s Nikkei 0.23%.
At 10.37am, the rand had strengthened 0.15% to R18.6514/$ and 0.28% to R20.3904/€, while it was little changed at R23.8992/£. The euro was 0.14% weaker at $1.0932.
Gold gained 0.23% to $2,164.44/oz, while platinum was little changed at $915.3/oz. Brent crude was 0.29% firmer at $83.61 a barrel.
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