Rand and JSE in for a rocky Wednesday
The markets are in for a rocky Wednesday ahead of a US central bank interest rate decision and an election upset in Alabama where the Democratic Party won its first senate seat since 1992.
US Federal Reserve Bank chairwoman Janet Yellen is expected to announce the central bank’s benchmark interest rate will rise to 1.5% from 1.25% at 9pm South African time on Wednesday.
The rand was slightly stronger at R13.66/$ at 6.30am as the dollar weakened after the Republican Party’s majority in the US Senate narrowed to 51 against 49 after Democrat candidate Doug Jones beat the Republican’s Roy Moore.
"Congratulations to Doug Jones on a hard fought victory. The write-in votes played a very big factor, but a win is a win. The people of Alabama are great, and the Republicans will have another shot at this seat in a very short period of time. It never ends!" US President Donald Trump tweeted at about 6am South African time.
The Republican party is expected to rush its tax bill through the legislature before Jones is sworn in.
Statistics SA is scheduled to release November’s consumer price index (CPI) data at 10am.
Inflation, as measured by the annual change in CPI, is expected to have slowed from October’s 4.8%.
Investec Bank economist Kamilla Kaplan said she expected inflation to slow to about 4.7%, "mainly on account of a continued moderation in food prices and a lower fuel price increase relative to the prior month".
Kaplan expected the average inflation for 2017 to be 5.3%, down from 6.3% in 2016.
"However, for 2018 and 2019 we forecast CPI inflation to rise to 5.7% and 5.8% respectively on a strengthening global cycle, a further lift in commodity prices and higher local administered tariffs."
Stats SA is scheduled to release October’s retail trade sales at 1pm and motor trade sales at 2.30pm.