The JSE was firmer on Wednesday morning, with global markets mixed as investors awaited the US Federal Reserve’s interest rate decision and May’s consumer inflation data.
The federal open market committee (FOMC) will conclude a two-day meeting on Wednesday, with an announcement of the outcome scheduled in the evening. The central bank will also release its latest economic projections, along with the interest rate outlook.
The general expectation in the market is for the FOMC to keep its benchmark borrowing rate in a range between 5.25%-5.5%. Investors will, however, be watching for insight into the future path of interest rates.
The US consumer inflation report for May will also be released later on Wednesday.
The consumer price index (CPI) is expected to be flat at 3.4% year on year, while core CPI is expected to have moderated slightly to 0.2% from May’s 0.3% month on month.
The recent strong jobs results and sticky inflation are supporting the Fed officials’ narrative of “higher-for-longer” interest rates, which led to the market yet again pushing back on September interest-rate-cuts bets.
“Markets await today’s latest US inflation data and the Fed FOMC rate decision later this afternoon. The FOMC is overwhelmingly expected to keep rates unchanged with a hawkish undertone, but all eyes will be on the Fed’s dot plot, which will show the Fed’s expected path for monetary policy,” TreasuryOne currency strategist Andre Cilliers said.
At 10.35, the JSE all share had gained 0.39% to 76,377.10 points and the top 40 0.42%.
At the same time in Europe, the FTSE 100 gained 0.71%, France's CAC 40 0.36% and Germany’s DAX 0.51%.
Earlier in Asia, the Shanghai Composite added 0.31%, while Hong Kong’s Hang Seng lost 1.31% and Japan’s Nikkei 0.66%.
Locally, the DA has agreed in principle to the formation of a government of national unity (GNU) with the ANC
“GNU optimism keeping the rand on the front foot. We look for ranges (R18.50/$ to R18.80/$) to continue and keep an eye on any news headlines coming from the local political talks,” said Cilliers.
At 10.45m, the rand had strengthened 0.14% to R18.5718/$, while it had weakened 0.17% to R19.9568/€ and 0.22% to R23.6926/£. The euro was little changed at $1.0749.
In the commodities market, gold was unchanged at $2,315.08/oz, while platinum lost 0.69% to $955/oz. Brent crude was 1.1% firmer at $82.81 a barrel.
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