JSE faces risk-off trade on Wednesday amid trade-war uncertainty
The JSE must contend with weaker Asian markets on Wednesday morning, with US President Donald Trump failing to soothe market concerns that economically damaging trade conflicts are coming to an end.
Trump hit out at EU tariffs on Tuesday evening, labelling them “in many ways worse than China’s”, as markets wait to see whether the US will slap a tariff on EU automobiles.
Trump also failed to clarify if the US was intending to roll back tariffs on China, with hopes that the two sides are closing in on a partial deal, which lifted risk assets in the early part of last week.
“While not wholly unexpected, but still, the market was hoping for a glimmer of concession,” said AxiTrader senior Asian markets analyst Stephen Innes in a note. At this point, markets will probably have to wait until a deal is signed, or not, for clarity on the rollback of tariffs between the two countries.
Asian markets were sharply lower, with Hong Kong’s Hang Seng down 1.76% and the Shanghai Composite falling 0.15% in morning trade.
The rand was little changed at R14.9314/$, having slipped a little overnight.
Gold was up 0.27% at $1,460/oz and platinum was flat at $871.34. Brent crude was 0.28% lower at $61.88 a barrel.
International focus is on the start of a two-day testimony before the US Congress by Federal Reserve chair Jerome Powell, who will clarify the bank’s outlook for the US economy.
Local focus is on retail sales numbers for September, with expectations that this picked up somewhat to 1.9% year on year.
The corporate calendar is reasonably light, though Peregrine Holdings is expected to report that headline earnings per share fell as much as 45% in its six months to end-September. This is due to once-off fees received during the prior comparative period.