JSE could get a boost on Tuesday from US-China trade war optimism

The JSE could benefit from a slightly improved mood on global markets on Tuesday morning, with Asian markets lifted by positive signs in the US-China trade war.

US and Chinese officials have made comments expressing optimism about signing a partial deal, providing hope that US tariffs scheduled for December may not be implemented.

Unlike previous trade talks at which expectations centred on the view that something is better than nothing, this time there appears to be a tangible and workable road map in place, said AxiTrader senior market analyst Stephen Innes in a note.

This has been supported by official confirmation that the US and China are on the same page about the intent to work towards phase one of a deal by mid-November, Innes said.

US corporate earnings are beating analyst expectations, helping US markets to push higher on Tuesday.

Markets are somewhat optimistic that a no-deal Brexit may be avoided, with the EU considering a request from the UK for another extension of the withdrawal deadline.

At 6.15am Hong Kong's Hang Seng was up 0.15%, while the Shanghai Composite was flat. Japanese markets were closed for a public holiday.

Gold was flat at $1,484.40/oz and platinum little changed at $888.14. Brent crude was down 0.24% to $58.90 a barrel.

The rand was flat at R14.7677/$.

Locally, the SA Reserve Bank’s leading indicator for August is expected to show an 11th consecutive month of decline.

The Bloomberg consensus is for the indicator to have fallen to 103.7 index points from 103.9 in July. The indicator is a strong projection of SA’s economic growth cycle for the next 6-12 months.

Pick n Pay is expected to report its interim results to end-August. Net debt at the retailers has jumped, due to accounting changes that will bring long-term leases onto the balance sheet, though this will have no effect on operations.

gernetzkyk@businesslive.co.za