The JSE touched another record high on Monday morning with the rand on track for its ninth consecutive day of gains, as last week’s rally continues.
The market upturn provided a welcome respite after a tumultuous start to August. Earlier in the month, underwhelming economic data had ignited recession fears and concern about the US Federal Reserve’s pace of rate cuts, triggering a global market plunge.
However, new data released last week calmed market anxieties and rekindled hope of a soft landing. Notably, the 12-month inflation rate, as measured by July’s consumer price index, dipped to 2.9% — its lowest level in more than three years.
Market participants are awaiting Fed chair Jerome Powell’s address at the Jackson Hole symposium in Wyoming on Friday, seeking clarity on the outlook for interest rate cuts. Minutes from the Federal Reserve’s most recent meeting, scheduled for release on Wednesday, will provide additional insight into the Fed’s policy deliberations.
“Markets have started the new week on a firmer note ahead of Wednesday's Fed’s minutes, which are expected to show a dovish Fed outlook, as well as Friday's speech from Jerome Powell at the Jackson Hole Symposium,” TreasuryOne currency strategist Andre Cilliers said.
“Markets are pricing in a 25 basis points (bps) cut in September with an outside chance of a 50 bps cut, while a further three cuts this year are now expected.”
At 10.45am, the JSE all share had gained 0.87% to 83,541.50 points — having touched a record level of 83,604 points — while the top 40 added 0.87%.
At the same time in Europe, the FTSE 100 had lost 0.19%, while France’s CAC 40 and Germany’s DAX were little changed.
Earlier in Asia, the Shanghai Composite gained 0.49% and Hong Kong’s Hang Seng 0.75%, while Japan’s Nikkei lost 1.77%.
The rand continues to lead gains in emerging-market currencies. However, Cilliers cautioned that the local currency was now getting into a short-term technical overbought position.
At 10.52am, the rand had strengthened 0.96% to R17.781/$, 0.95% to R19.6221/€ and 0.74% to R23.0513/£. The euro was 0.1% firmer at $1.1035.
In commodity markets, gold lost 0.13% to $2,503.55/oz and platinum 0.22% to $950.42/oz. Brent crude was 0.36% weaker at $79.30 a barrel.
Would you like to comment on this article?
Sign up (it's quick and free) or sign in now.
Please read our Comment Policy before commenting.