JSE faces positive Asian markets on Thursday after US inflation print

The JSE looks set to join a buoyant session for Asian markets on Thursday morning, with investors still welcoming a better-than-expected US inflation report from Wednesday.

Wall Street jumped overnight, with the S&P 500 adding more than 2% and reaching a three-month high after the inflation numbers, which have significantly eased concerns over the future path of interest rates in the world’s largest economy.

“The shift in sentiment is mostly due to investors searching for yield, and one could argue now that the market expects US inflation to have reached its peak, and that the Fed will not have the license to remain aggressive for the remainder of the year and hike by 75 basis points (bps) in September,” TreasuryONE analysts said in a note on Wednesday.

International attention will now turn to US producer inflation numbers for July at 2.30pm SA time. Factory-gate inflation is expected to have eased to 10.4%, from 11.3% in June.

In morning trade, the Shanghai Composite was up 1.18% and the Hang Seng 1.78%, while Australia’s All Ordinaries index had gained almost 1%. Japanese markets are closed for the Mountain Day holiday, which celebrates mountains.

Tencent, influential to the JSE due to the Naspers stable, had gained 1.35%.

Gold was 0.39% weaker at $1,874.40/oz, while platinum had firmed 0.33% to $943.40. Brent crude was little changed at $97.01 a barrel, having fallen almost 10% on a one-month basis.

The rand was 0.18% weaker at R16.224/$, having jumped almost 2.4% on Wednesday, its best day in almost two years.

Markets will react to MTN's results later, with Africa's largest mobile operator reporting headline profits rose by almost half to end-June, boosted by surging data demand.

Mining and manufacturing-production data for June is due later. Mining output is expected to have contracted for a fifth straight month, though it is also expected to have eased from May’s 7.8% fall.

Manufacturing output is expected to have eased from May’s 2.9% fall, but still have contracted in a month when load-shedding had ramped up amid unprotected work stoppages at Eskom.

gernetzkyk@businesslive.co.za