JSE may benefit from higher Asian markets ahead of US inflation numbers

The JSE, which snapped a five-session losing streak on Tuesday, faces higher Asian markets on Wednesday morning, with all eyes on US consumer inflation numbers later.

Global stocks have been buffeted so far in May by concerns of major economies slipping into recession, and the local bourse reached a more than six month low before staging a mild recovery on Tuesday, when it rose 0.3%.

Market focus on Wednesday is squarely on US consumer inflation data, due at 2.30pm SA time. Inflation is expected to have eased to 8.1% from 8.5% in the previous month, which was its highest in more than four decades.

Significantly lower US inflation readings this month would, probably temporarily, ease some market concerns, Investec chief economist Annabel Bishop said in a note

However, the US labour market would need to cool substantially too for the US Federal Reserve to dial back its view of 50 basis point hikes pencilled in for the next two meetings, while inflation is still extremely far from the Fed’s unofficial 2% target, she said.

In morning trade on Wednesday the Shanghai Composite was up 1.62% and the Hang Seng 1.72%, while Japan’s Nikkei was flat. 

Tencent, which influences the JSE via Naspers, had added 4.4%.

Gold was  little changed at $1,838.392/oz while platinum was up 1.09% to $978. Brent crude was 3.62% higher at $104.76 a barrel.

The rand was 0.3% firmer at R16.08/$, extending a 0.54% gain on Tuesday, but having still lost almost 10% on a one-month basis.

gernetzkyk@businesslive.co.za