The JSE was firmer on Wednesday morning, with global markets mixed as investors digested comments by US Federal Reserve officials.
San Francisco Fed president Mary Daly stated that an interest rate cut this month was uncertain but remained a possibility. The last Federal Open Market Committee (FOMC) meeting for the year is scheduled for December 17-18.
Daly also mentioned that the central bank was on track for more rate cuts this year, provided data met expectations. She noted that even with the previous rate cut, monetary policy was still working to bring inflation pressures down. Daly’s comments align with other policymakers who expect the US central bank to continue cutting interest rates over the next year, although they stopped short of committing to the next reduction this month.
Fed governor Adriana Kugler added that the US economy remained in a “good position” and inflation was on a “sustainable path” towards the central bank’s 2% goal.
Investors will get more comments from Fed officials, including chair Jerome Powell, who will participate in a moderated discussion in New York on Wednesday afternoon.
On the data front, Tuesday’s numbers showed US job openings exceeded economists’ forecasts. On Wednesday, traders will review the ADP private payrolls report for November, which is expected to show growth of 163,000 positions, according to economists polled by Bloomberg.
“Fed policymakers believe inflation is heading towards their 2% target, but show no strong consensus for a December cut. US job openings increased solidly, showing that the employment market remains resilient,” Citadel Global director Bianca Botes said.
“Markets are confident the Fed will cut by 25 basis points on December 18, pricing in a cut at 70.3% probability,” added Botes.
At 10.35am, the JSE all share had gained 0.56% to 86,299.83 points, with major indices mixed, while the top 40 added 0.56%.
At the same time in Europe, the FTSE 100 had lost 0.1%, while France’s CAC 40 had gained 0.32% and Germany’s DAX 0.72%.
Earlier in Asia, the Shanghai Composite lost 0.42%, while Hong Kong’s Hang Seng and Japan’s Nikkei were little changed.
The rand started the day weaker, reaching an intraday weakest level of R18.1719/$.
“The rand is generally trading in tight ranges, despite the weaker third quarter GDP number, which showed an unexpected contraction in the economy,” said RMB head of forex execution Matete Thulare.
“For now, current ranges of R18.05 to R18.25 trades continue, with a break on either side required for a new direction,” said Thulare.
At 10.34am, the rand had weakened 0.31% to R18.1555/$, 0.29% to R19.0419/€ and 0.38% to R23.0111/£. The euro was little changed at $1.05.
In the commodities markets, gold was little changed at $2,641.63/oz, while platinum lost 0.49% to $947.52/oz. Brent crude was 0.2% firmer at $73.79 a barrel.
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