The JSE was little changed on Thursday morning, while its global peers were mixed as investors assessed US economic data.
October’s consumer price index (CPI) rose 2.6% year on year and 0.2% month on month, aligning with forecasts. Core inflation also met expectations, increasing 3.3% year on year and 0.3% month on month.
Inflation concerns have resurfaced as investors weigh the effect of president-elect Donald Trump’s policies.
This uncertainty had driven US treasury yields higher, signalling increased borrowing costs, reported Bloomberg.
Minneapolis Fed president Neel Kashkari said inflation data would be a key focus for the central bank in the coming weeks. He noted that any upside surprises could prompt caution.
According to the CME FedWatch tool, 80% of traders expect a December rate cut. However, economists have warned of potential inflationary pressures since Trump’s election, citing his campaign promises of high tariffs on imported goods and corporate tax cuts.
“Wednesday’s US CPI data, which met expectations overall, despite the three-month annualised core rate of inflation having increased, increased the likelihood of a Fed rate cut in mid-December,” said Citadel Global director Bianca Botes.
“Fed officials, however, continued to express uncertainty about how much rates may need to be lowered, reflecting the challenges in managing the US economy,” said Botes.
At 10.20pm, the JSE all share and the top 40 were little changed, with the former at 83,874.65 points. SA listed property had gained 1.29%, banks 1.19%, financials 1.04%, food producers 0.95%, industrials 0.41% and retailers 0.37%. Precious metals had fallen 3.64%, resources 2.72% and industrial metals 1.07%.
At the same time in Europe, the FTSE 100 had lost 0.13%, while France’s CAC 40 0.29% and Germany’s DAX 0.52%.
Earlier in Asia, the Shanghai Composite fell 1.73%, Hong Kong’s Hang Seng 1.97% and Japan’s Nikkei 0.48%.
The producer price index (PPI) data is scheduled for release later in the afternoon, while retail sales numbers will be announced on Friday. The releases will provide valuable clarity on the US economy’s performance and further insights into the Fed policy direction.
Fed chair Jerome Powell is due to speak on Thursday in Dallas, Texas.
At 10.32am, the rand had weakened 0.18% to R18.241/$ and 0.13% to R23.151/£, while it was little changed at R19.2437/€. The euro was 0.16% weaker at $1.0545.
In the commodities markets, gold lost 0.59% to $2,557.18/oz, while platinum was little changed at $936.8/oz. Brent crude was 0.16% firmer at $72.1 a barrel.
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