The JSE was firmer on Wednesday morning, tracking firmer global markets as investors awaited the US consumer inflation report.
December’s consumer price index (CPI), a key gauge of inflation, is expected to show US headline CPI rising 0.3% on a monthly basis and gaining 2.9% on year on year. The inflation reading will be a key consideration for the US Federal Reserve as it makes its interest rate decision later this month.
The US producer price index (PPI), which measures wholesale inflation, increased 0.2% in December, falling short of economists’ expectations of a 0.4% rise, as polled by Bloomberg. Core PPI excluding food and energy remained flat.
The PPI report eased concerns about inflation acceleration, sparking a positive reaction in the stock market.
“Traders await today’s US inflation data, which is expected to influence the Fed’s interest rate decisions,” said Citadel Global director Bianca Botes.
“If the reading is higher than expected, it could signal prolonged high interest rates due to persistent inflation in the US,” said Botes.
At 10.25am, the JSE all share had gained 0.52% to 82,552 points and the top 40 was 0.58 firmer.
At the same time in Europe, the FTSE 100 was up 0.65%, France’s CAC 40 0.15% and Germany’s DAX 0.28%.
Earlier in Asia, the Shanghai Composite lost 0.43%, while Hong Kong’s Hang Seng gained 0.34% and Japan’s Nikkei was little changed.
At 10.40am, the rand had firmed 0.3% to R18.88/$, 0.26% to R19.45/€ and 0.23% to R23.05/£. The euro was little changed at $1.03.
The rand recovered to slightly below R19/$, “supported by its undervaluation, though volatility persists due to strong dollar performance,” TreasuryOne currency strategist Andre Cilliers said.
“Today’s US CPI data is expected to influence monetary policy and bond yields globally, with forecasts pointing to further dollar strength,” said Cilliers.
Gold gained 0.24% to $2,683.92/oz and platinum 1.06% to $946.2/oz. Brent crude was 0.33% firmer at $80.18 a barrel.
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