JSE poised to recover in line with global markets
Market participants watch for US consumer inflation due out on Tuesday afternoon
The JSE was poised to open higher on Tuesday morning, taking its lead from Asia where risk assets were relatively well supported after a soft start to the week.
Japan’s Nikkei 225 and Hong Kong’s Hang Seng were up about 1%, respectively, after Wall Street ended little changed near record highs.
The next catalyst for stocks will mostly be US corporate earnings for the first quarter, starting on Wednesday with banks such as JPMorgan and Bank of America.
Stocks have been on a tear over the past three months, boosted by improved global outlook amid the wider rollout of the Covid-19 vaccines.
Market participants will keep a close watch on US consumer inflation, which is due out on Tuesday afternoon. The consumer price index is expected to have accelerated to an annual rate of 2.5% in March, according to Bloomberg median estimate, from 1.7% in March.
This will be well above the US Federal Reserve’s target band of 2%, though this will not necessarily lead to higher interest rates in the short term. Fed chair Jerome Powell has previously said that inflationary pressures will be transitory.
Higher interest rates in the US could hurt the rand via bond outflows. The rand held steady at 14.59/$ in early trade.
Oil markets were higher, with Brent crude gaining just 0.50% to $63 a barrel.
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