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Picture: BLOOMBERG/SOICHIRO KORIYAMA
Picture: BLOOMBERG/SOICHIRO KORIYAMA

The JSE looks set to open to positive Asian markets on Monday morning before what should be a busy week for news, much of it focused on Europe.

Attention is on Europe before the European Central Bank (ECB) policy announcement on Thursday, with a hike widely expected as the continent battles with surging inflation.

Italy's coalition government is also under threat of collapse, and Prime Minister Mario Draghi is set to address parliament this week after threatening to resign, an issue that is contributing to the likelihood the ECB will only hike interest rates 25 basis points this week, according to Swissquote Bank senior analyst Ipek Ozkardeskaya.

“The eurozone is too fragile, both from economic and political perspectives, to allow the ECB to take a more significant step,” she said in a note on Friday.

SA also looks set for a 50 basis point interest rate hike this week, but attention is likely to be largely offshore, with investors also concerned that Russia may not turn back on the Nord Stream pipeline this week that is undergoing maintenance.

US markets showed recovery on Friday, helped by better than expected retail sales numbers for June, as well as commentary from US Federal Reserve officials that pushed back on the prospect of a 100 basis point interest rate hike later this month.

In morning trade the hang seng was up 2.58% and the Shanghai composite 1.49%, while Japan's nikkei gained 0.54%.

Tencent, which influences the JSE via the Naspers stable, rose 2.34%.

Gold was 0.49% higher at $1,716.08/oz while platinum firmed 0.94% to $859. Brent crude was 2.16% higher at $101.71 a barrel.

The rand was slightly stronger at R17.04/$.

The local corporate and economic calendars are bare on Monday, while international attention will be on US earnings.

Numerous major firms are set to report this week, including IBM, Tesla, Twitter and Bank of America.

gernetzkyk@businesslive.co.za

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