JSE likely to grind higher ahead of US inflation print

The JSE, which is near record high levels, will likely grind higher on Thursday in line with global markets.

Earlier this week, the all share index nearly hit the 73,000-point mark for the first time before pulling back slightly.

With the Omicron variant of Covid-19 on the back burner, investors’ immediate attention will be on the release of US inflation figures on Friday and their potential implications on future interest rates.

The US consumer price index (CPI) is expected to have risen to an annual rate of 6.8% in November, according to a Bloomberg median estimate, from 6.2% in October. The so-called core inflation, which excludes volatile energy and food, is likely to have risen to 4.9% year on year from 4.6%.

The US CPI has consistently run above the US Federal Reserve’s 2% target for months.

The increases in the US rates have the potential to suck capital from emerging markets like SA.

“US markets managed to maintain Omicron is weak, buy everything rally overnight, albeit at a much less frenzied pace than the day before,” said Jeffrey Halley,  senior market analyst at Oanda.

“That sits nicely with my ‘V for volatility’ outlook for December and readers should not be fooled into thinking the risks of whipsaw price have now disappeared. I’ll say it again, volatility will be the winner in December, not directional plays.” 

mahlangua@businesslive.co.za