JSE may struggle on Wednesday amid weaker Asian markets after Fed comments
Comments on inflation from policymakers overnight are weighing on risk assets, with tightening of sanctions against Russia also in focus
06 April 2022 - 07:24
byKarl Gernetzky
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The JSE looks set to join struggling Asian markets on Wednesday morning, with comments from two US Federal Reserve officials weighing on sentiment, while much attention is still on the war in Ukraine.
Two US Federal Reserve officials spoke overnight, emphasising their concern about the risks of runaway inflation, putting pressure on US stocks ahead of the release of Fed minutes on Wednesday.
This includes comments from Fed governor Lael Brainard, who suggested a 50 basis point hike was on the table.
“What makes the comments overnight so significant is that Brainard is typically one of the most dovish of the Fed open market committee members,” said Oanda senior market Jeffrey Halley in a note. “If she has swung into the uber hawk camp, then markets need to take notice, and that they did.”
Markets are also considering news that Europe is looking to phase out imports of Russian coal, with details under discussion, which could presage similar moves for oil and gas.
This helped lift SA coal miners on Tuesday, with Thungela surging almost 10% but the prospect of higher interest rates and energy costs could ultimately weigh on global demand.
A recession is currently unlikely in the US in 2022, while Europe more affected by the conflict and attendant risks, said Investec chief economist Annabel Bishop in a note on Tuesday.
However, the conflict is expected to come to an end rather, if not cease, during the second quarter of the year, she said.
In morning trade Japan’s Nikkei was down 1.69% and the Hang Seng 1.42%. The Shanghai Composite lost only 0.22%, but was closed on Monday and Tuesday for the Qingming festival.
Tencent, which can give direction to the local bourse via Naspers, was down 1.85%.
Gold was down 0.14% to $1,921.94/oz while platinum gave back 0.31% to $964.01. Brent crude was 1.06% higher at $106.30/$.
The rand was 0.15% weaker at R14.69/$, having slipped 0.6% on Tuesday.
The local corporate and economic calendar is bare on Wednesday.
Support our award-winning journalism. The Premium package (digital only) is R30 for the first month and thereafter you pay R129 p/m now ad-free for all subscribers.
JSE may struggle on Wednesday amid weaker Asian markets after Fed comments
Comments on inflation from policymakers overnight are weighing on risk assets, with tightening of sanctions against Russia also in focus
The JSE looks set to join struggling Asian markets on Wednesday morning, with comments from two US Federal Reserve officials weighing on sentiment, while much attention is still on the war in Ukraine.
Two US Federal Reserve officials spoke overnight, emphasising their concern about the risks of runaway inflation, putting pressure on US stocks ahead of the release of Fed minutes on Wednesday.
This includes comments from Fed governor Lael Brainard, who suggested a 50 basis point hike was on the table.
“What makes the comments overnight so significant is that Brainard is typically one of the most dovish of the Fed open market committee members,” said Oanda senior market Jeffrey Halley in a note. “If she has swung into the uber hawk camp, then markets need to take notice, and that they did.”
Markets are also considering news that Europe is looking to phase out imports of Russian coal, with details under discussion, which could presage similar moves for oil and gas.
This helped lift SA coal miners on Tuesday, with Thungela surging almost 10% but the prospect of higher interest rates and energy costs could ultimately weigh on global demand.
A recession is currently unlikely in the US in 2022, while Europe more affected by the conflict and attendant risks, said Investec chief economist Annabel Bishop in a note on Tuesday.
However, the conflict is expected to come to an end rather, if not cease, during the second quarter of the year, she said.
In morning trade Japan’s Nikkei was down 1.69% and the Hang Seng 1.42%. The Shanghai Composite lost only 0.22%, but was closed on Monday and Tuesday for the Qingming festival.
Tencent, which can give direction to the local bourse via Naspers, was down 1.85%.
Gold was down 0.14% to $1,921.94/oz while platinum gave back 0.31% to $964.01. Brent crude was 1.06% higher at $106.30/$.
The rand was 0.15% weaker at R14.69/$, having slipped 0.6% on Tuesday.
The local corporate and economic calendar is bare on Wednesday.
gernetzkyk@businesslive.co.za
WATCH: Oil rises on the prospect of fresh Russia sanctions
MARKET WRAP: Russia and US economy pull JSE lower
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