JSE likely to tread water ahead of US nonfarm payrolls report

The JSE, which came within a striking distance of a record high this week, could struggle to find a clear path given the mixed signals from Asia and as investors look to the release of a US nonfarm payrolls report that could rekindle bets of a potential hike in interest rates in the world’s largest economy.

The closely watched US jobs report, to be released on Friday afternoon, comes two days after US Federal Reserve chair Jerome Powell said policy approach will be guided by the data, including the so-called maximum employment.

The US economy likely created 450,000 jobs in October, according to Bloomberg median estimate, more than double the preceding month when just 194,000 jobs were created. The US unemployment rate likely dipped to 4.7% from 4.8%.

The rand, which benefited from the Fed’s dovish stance earlier this week, was marginally weaker in early trade on Friday at R15.22/$. Earlier in the week before the Fed’s meeting, it exchanged hands at R15.50/$, the weakest since mid-August, according to Infront data.

While the JSE could tread water on Friday, its performance on the week has been particularly impressive. Industrial stocks in particular stood out, with luxury goods maker Richemont hitting a record high. Banks and property stocks also fared well during the week. However, mining stocks, which have a big weighting on the all share index, took a shine off the overall market.

Elsewhere, commodity prices were moderately higher on the day, but Brent crude was flat at $80.90 per barrel after oil cartel Opec and allies chose to maintain monthly output increases at 400,000 barrels per day.

mahlangua@businesslive.co.za