The JSE was weaker on Wednesday morning, with global markets mixed, as investors awaited the highly anticipated US inflation report scheduled for release later in the day.
Traders are eagerly awaiting the November US consumer price index (CPI) reading, which is expected to provide valuable insights into the state of inflation. According to economists polled by Bloomberg, the US CPI is forecast to rise 0.3% from October and 2.7% year on year.
Excluding volatile food and energy prices, the core CPI is expected to increase 0.3% month on month and 3.3% from 12 months earlier.
This key inflation data release comes ahead of the US producer price index (PPI) report, expected later in the week. These reports are among the last major economic data releases before the Federal Reserve’s policy meeting next week.
Market expectations are currently leaning towards a potential interest rate cut, with Fed funds futures indicating a more than 85% likelihood of a rate reduction, according to CME’s FedWatch Tool.
Analysts said Tuesday’s market movements reflected a “waiting mode” ahead of the CPI release, with some market participants expressing concern about potential inflationary pressures.
“Today’s [US] CPI report will give the Fed more insight ahead of its FOMC meeting, with markets predicting an 85% chance of a rate cut later this month,” Citadel Global director Bianca Botes said.
At 11am, the JSE all share had lost 0.57% to 86,774.22 points, with major indices mixed, while the top 40 was down 0.63%.
At the same time in Europe, the FTSE 100 was down 0.22%, while France’s CAC 40 and Germany’s DAX were little changed.
Earlier in Asia, the Shanghai Composite gained 0.29%, while Hong Kong’s Hang Seng lost 0.64% and Japan’s Nikkei was unchanged.
At 10.58am, the rand had weakened 0.3% to R17.8499/$ and 0.21% to R22.7606/£, while it was little changed at R18.7586/€. The euro was 0.18% weaker at $1.0508.
In the commodities markets, gold was little changed at $2,691.41/oz, while platinum lost 0.89% to $930.5/oz. Brent crude was 0.97% firmer at $72.73 a barrel.
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