The JSE was slightly firmer on Monday morning, with global markets mixed as investors looked ahead to US inflation data this week.
The all-share index ended the previous week on a weaker note, declining by more than 2.5% due to concerns about a slowing labour market sparked by the key US August jobs report.
The report, released on Friday, showed that nonfarm payrolls increased by 142,000, falling short of the market's expected gain of 161,000. This shortfall sparked fears that the labour market may be losing momentum, which could have broader implications for the economy.
However, the unemployment rate did slow to 4.2%, which was in line with economists’ expectations. This suggests that the labour market is still relatively strong, despite the miss on the payroll growth.
This week, investors will closely monitor two crucial inflation reports, which could influence the Federal Reserve’s decision at its upcoming federal open market committee meeting, taking place next week.
The August US consumer and producer price reports are scheduled for release on Wednesday and Thursday, respectively. These reports will provide valuable insights into the current state of inflation, which is a key factor in the Fed’s decision-making process.
Some analysts believe that even weaker-than-expected consumer price report may not be sufficient to prompt a more substantial rate cut. This is because the Fed has already signalled that it is likely to cut rates and may be hesitant to make a more aggressive move without clear evidence of a slowdown in the economy.
“Last week’s mixed US labour market data has left investors uncertain about what to expect from the Fed when it meets on September 18,” said Citadel Global director Bianca Botes. “Markets are now suggesting a 30% chance of a 50 bps rate cut.”
The JSE all share had gained 0.14% to 81,481.95 points and the top 40 was up 0.1%. Food producers had added 1.73%, industrial metals 1.01%, banks 0.28%, resources 0.26%, financials 0.24% and SA listed property 0.17%. Retailers had lost 0.24%.
At the same time in Europe, the FTSE 100 had gained 0.45% and Germany’s DAX 0.4%.
Earlier in Asia, the Shanghai Composite lost 0.92%, Hong Kong’s Hang Seng 0.14% and Japan’s Nikkei 0.48%.
At 10.30am, the rand had weakened 0.43% to R17.9297/$ and 0.22% to R23.4659/£, while it was little changed at R19.8091/€. The euro was 0.31% weaker at $1.1048.
In commodities markets, gold weakened 0.23% to $2,491.39/oz, while platinum gained 1.69% to $934.31/oz. Brent crude was 0.63% firmer at $71.92 a barrel.
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