The JSE was little changed on Monday morning, while the JSE was weaker as focus shifted to the US Federal Reserve’s policy meeting this week.
Data on Friday showed that non-farm payrolls (NFP) in May came in stronger than expected. The report also showed the unemployment rate rising for a second straight month, signalling continued strength in the jobs market.
The Fed will conclude its federal open market committee (FOMC) meeting on Wednesday, with the country’s consumer inflation report due to be released on the same day.
“Friday’s surprise stronger-than-expected NFP number dampened any hopes of a Fed rate cut in the coming months,” TreasuryOne currency strategist Andre Cilliers said.
Locally, investors are monitoring progress on the announced government of national unity (GNU). The ANC has already conducted initial coalition engagements with the DA, EFF, IFP, PA and the National Freedom Party.
The DA and the IFP have agreed in principle to the ANC proposal to form a GNU, while the EFF has said that it would reject the GNU proposal if it involved the DA and the FF Plus.
This week, political parties will continue negotiations as the deadline approaches to form a government that will lead SA for the next five years.
“The optimism of a government of national unity that excludes the MK and EFF parties, initially saw the rand rally before the surprisingly strong US NFP data saw the dollar rally quite sharply and the rand come under pressure,” Cilliers said.
“Talks between the various parties are continuing and we are likely only to get some clarity on the make-up of the GNU later in the week. The rand is, however, holding fairly steady this morning, given the stronger dollar and softer emerging-market currencies.”
At 9.20am, the rand was little changed at R18.9069/$, while it had strengthened 0.23% to R20.2809/€ and 0.42% to R24.0662/£. The euro was 0.37% weaker at $1.0761.
At 9.30am, the JSE all share had lost 0.94% to 76,133.06 points and the top 40 was up 0.98%.
At the same time in Europe, the FTSE 100 was down 0.6%, France’s CAC 40 1.3% and Germany’s DAX 0.74%.
Earlier in Asia, the Shanghai Composite was little changed, while Hong Kong’s Hang Seng lost 0.59% and Japan’s Nikkei added 0.92%.
In the commodities market, gold gained 0.11% to $2,295.08/oz and platinum 0.59% to $975.60/oz. Brent crude was 0.44% firmer at $79.96 a barrel.
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