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The bear and bull statues outside the Frankfurt Stock Exchange. Picture: BLOOMBERG/ALEX KRAUS
The bear and bull statues outside the Frankfurt Stock Exchange. Picture: BLOOMBERG/ALEX KRAUS

The JSE looks set to contend with mixed Asian markets on Thursday morning, with investors digesting US Federal Reserve minutes, which pointed to a series of interest rate hikes.

There were signs the minutes were well received, despite clear indications that aggressive tightening on conditions are on their way, with all participants of the May meeting in favour of paring back monetary policy support.

“Most participants judged that 50 basis point (bp) increases in the target range would likely be appropriate at the next couple of meetings,” the minutes read.

Given that the Fed pivot is the most clearly communicated rate hike cycle in modern history and will continue to be so, stocks strengthened as the market now seems convinced there will be few double-paced rate hike twists in the future, SPI Asset Management managing partner said Stephen Innes in a note.

In morning trade the Shanghai Composite was up 0.65% and Japan’s Nikkei 0.16%, while the Hang Seng lost 0.13% and Australia’s All Ordinaries index 0.35%.

Tencent, which can give direction to the JSE via Naspers, gained 0.3%.

Gold was down 0.23% to $1,848.98/oz while platinum was 0.22% lower at $941.86. Brent crude was flat at $114.40 a barrel.

The rand was 0.22% weaker at R15.75/$.

In July the Fed is expected to hike by 50bps again and, unless the Reserve Bank delivers another 50bp hike in July, the rand will be at an increased risk of depreciation, Investec chief economist Annabel Bishop said in a note.

“SA needs to match the quantum of US interest rate hikes to avoid rand weakness, which historically has been very severe when SA has been out of line with the US rate hike tightening cycle,” she said.

Producer price inflation numbers for April are due later; growth in factory gate prices is expected to have accelerated to 12.3% from 11.9% in March. This would be the fifth consecutive month of double-digit producer inflation.

Chrome and platinum group metals miner Tharisa is due to release results for its half year to end-March later. The company said in a recent trading update that earnings are expected to rise by about half, though it did not go into details.

Hospital operator Life Healthcare is due to release its results for the six months to end-March later. An earnings decline of about 20% is expected after disposals and Covid-19 contracts boosted earnings in the previous comparative period.

Tsogo Sun Hotels is due to release its results for the year to end-March later; the company expects a significant improvement in its headline loss per share, with the group reporting receipt of insurance proceeds in a recent trading update.

Cape Town-focused property group Spear is due to release its results for the year to end-February later, saying in a recent trading update that its distribution per share could rise as much as 17.97%, but it did not go into detail.

gernetzkyk@businesslive.co.za

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