The JSE capped a week of gains on Friday, closing at yet another record high, with industrial metals leading the way after China announced a raft of stimulus measures on Tuesday.
With China the largest consumer of SA metals, the industrial metal index, which includes BHP, Glencore and Anglo American, gained almost 12% on the week.
The rand held steady at its strongest levels since February 2023 after a US inflation report showed a cooler-than-expected increase in prices.
The August reading of the Personal Consumption Expenditures (PCE) price index, the Federal Reserve’s preferred inflation metric, indicated a sustained easing of price pressures.
The core PCE index, closely watched by policymakers, increased 0.1% month on month, below market expectations of a 0.2% acceleration in prices.
The PCE is considered a more accurate and comprehensive inflation metric than the the consumer price index (CPI) due to its dynamic weighting of consumer spending, which better reflects changing consumption patterns.
According to Bloomberg, the report has boosted expectations of another substantial rate cut by the Fed, with more than 52% of traders now expecting another 50 basis point reduction in borrowing costs.
TreasuryONE director and head of market risk Wichard Cilliers said: “Markets are pricing in a 50% chance of another half-percentage rate cut in November.”
“The labour data next week will be key in the weighting of the market's perception of what the Fed should do next and thus opens the door to some volatility,” said Cilliers.
The JSE all share gained 0.29% to 87,579 points — with major indices mixed — while the top 40 added 0.36%.
For the week, the all share rose 4.47% and industrial metals 11.86%. All the major indices made gains, with food producers yielding the smallest increase.
The rand continued its recent run, reaching an intraday best of R17.05/$.
RMB head of forex execution Matete Thulare said the rand remained resilient as the country reached 100 days since the formation of the government of national unity (GNU). “Better electricity production with fewer power cuts, and interest rate cuts not only locally but also from the Fed have all added to the risk-on play in the rand.”
At 6.05pm, the rand had strengthened 0.41% to R17.1034/$, 0.56% to R19.0759/€ and 0.58% to R22.8934/£. The euro was 0.19% weaker at $1.1155.
Thulare did caution, however, that “after the moves of this week, we expect the rand to consolidate”.
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