JSE faces mostly positive Asian markets ahead of US inflation data

The JSE looks set to open to positive Asian markets on Wednesday morning, with the rand hovering around R17/$, amid intense focus on US inflation numbers later.

US consumer inflation is expected to accelerate to 8.8% year-on-year in June from 8.6% in the previous month, but there are hopes that price pressures are peaking. Any miss on market expectations should prompt a significant market reaction, something that may subdue trade ahead of the release at 2.30pm SA time.

There was some positive news in terms of falling oil prices and a slightly recovering rand, with analysts citing recession fears for oil’s fall back below $100 a barrel on Tuesday.

Also a factor is China’s growing Covid-19 case numbers, but meanwhile, the physical oil market itself remains tight, said National Australia Bank (NAB) economics director Tapas Strickland in a note.

In morning trade, the Hang Seng was up 0.75%, Japan’s Nikkei 0.52% and the Shanghai Composite 0.36%.

Tencent, which influences the JSE via the Naspers stable, was flat.

Gold was little changed at $1,726.69/oz and platinum was flat at $843.50. Brent crude had gained 0.4% to $99.46 a barrel.

The rand was oscillating between R16.99/$ and R17/$.

The local corporate calendar is bare on Wednesday, while retail sales numbers for May are due later. Retail sales growth is expected to have moderated from April’s 3.4% year-on-year growth, with consumer’s disposable income coming under some pressure from higher interest rates and inflation, notably for food and energy.

gernetzkyk@businesslive.co.za