MARKET PREVIEW: JSE could tread water as markets await Fed policy meeting

The JSE could pause for breath on Monday after setting a series of record peaks last week.

The all share index rose nearly 2% last week, stretching the month-to-date gains to just shy of 11%.

The global markets, which typically drive the sentiment on the local market scene, were mostly patchy on Monday morning but Hong Kong’s Hang Seng lost 1.6%.

Global markets have generally had a flying start to the day, which render them vulnerable to weakness short term.

The US Federal Reserve’s policy meeting on Wednesday will be the main event given its central role in setting the pace for the central banks, particularly emerging markets such as SA.

The Fed is widely projected to increase interest rates a cumulative 50 basis points in 2023 before pausing in its hiking cycle given signs of easing inflation.

The US policy rate trajectory has had a big influence on the rand, which weakened dramatically in 2022 before recovering some ground from the fourth quarter.

While global inflation has plateaued, it is still far from reaching targeted levels, complicating the task of the central banks.

In commodity markets, Brent crude was flat at $86 per barrel while gold edged up 0.29% to $1,932.41/oz and platinum rose 1% to $1,021.22oz.

mahlangua@businesslive.co.za