JSE faces weaker Asian markets on Wednesday ahead of US inflation

The JSE looks set to join mostly Asian markets on Wednesday morning, with a major risk event looming later in the form of US inflation numbers.

Markets will closely scrutinise the data, due at 2.30pm SA time, to gauge the likelihood that the US Federal Reserve will deliver another 75 basis point (bps) interest rate hike at its September meeting.

Headline inflation is expected to moderate to 8.7% in July, from 9.1% in the prior month, but any miss should be expected to stoke market volatility. Core inflation, which excludes volatile food and energy components, is expected to pick up to 6.1% from 5.9% previously.

US markets were slightly weaker overnight, with caution setting in ahead of data, while SA markets had been closed for a public holiday.

In morning trade, the Hang Seng was down 2.09%, Japan’s Nikkei 0.72% and the Shanghai Composite 0.32%.

Tencent, important to the JSE due to the size of Naspers, its single-biggest shareholder, had fallen 1.28%.

Gold was 0.12% weaker at $1,791.10/oz while platinum had fallen 0.19% to $929. Brent crude had dropped 0.51% to $95.98 a barrel.

The rand was flat at R16.59/$, having firmed about 1% over the past two sessions.

Nedbank is due to report a rise in headline earnings per share (EPS) of as much as 28% in its half-year to end-June later. Like other SA lenders, the group has received some benefit from rising interest rates so far in 2022, when many have reported on a pick up in loan activity.

The SA Chamber of Commerce and Industry’s (Sacci) business confidence indexes for June and July are due later, providing insight into the health of underlying sentiment in SA’s economy.

The Sacci business confidence index fell to 89.3 in May from 93.7 in April, the lowest reading since September 2020.

gernetzkyk@businesslive.co.za