JSE firmer on US jobs data focus

The JSE closed firmer while global peers were mixed on Monday, with investors looking ahead to US jobs data this week.

November nonfarm payroll (NFP) jobs data is due for release on Friday, with investors expecting the report to confirm that the Federal Reserve (Fed) is done with hiking rates and could cut them next year.

Fed chair Jerome Powell said on Friday it was premature for market participants to anticipate easing in monetary policy, adding that the Federal Open Market Committee plans on “keeping policy restrictive” until policymakers are convinced that inflation is heading solidly back to 2%.

Powell’s comments come as investors are increasingly betting that the Fed will hold interest rates steady at its policy meeting in December.

“The next couple of weeks could be massive for financial markets going into 2024, with a range of data from the US in the coming days setting us up nicely for the Fed [December 12-13] meeting,” said Oanda senior market analyst Craig Erlam. “The standout event is the jobs report on Friday, with the Fed still seemingly of the view that getting inflation back sustainably to target will require some more slack in the labour market.”

“Another weaker report could further fuel the belief that not only is the tightening cycle over but rate cuts may not be far away,” said Erlam. “Markets are pricing a March cut as slightly more likely than not and by May as almost certain.”

The JSE all share gained 0.31% to 75,941.06 points and the top 40 0.15%. Retailers added 2.3%, food producers 2.07%, industrials 1.79% and SA listed property 1.24%. The precious metals and mining index lost 2.85%, resources 2.37%, and industrial metals 1.83%.

At 5.35am, the Dow Jones industrial average was 0.46% weaker, while European markets were mixed.

At 5.28pm, the rand had weakened 0.94% to R18.81/$, 0.31% to R20.3452/€ and 0.34% to R23.7344/£. The euro was 0.6% weaker at $1.0816.

Gold prices surged to a record high of more than $2,100/oz in early trade “on the back of easing inflation, soft labour market data and less hawkish signals from the Fed, which have fuelled speculation that the central bank may cut rates in early 2024,” said Citadel Global director Bianca Botes.

At 5.35pm, gold had given back some gains and was down 2.33% to $2,023.61/oz. Platinum lost 2.23% to $913.88/oz, while Brent crude was 0.25% firmer at $79.30 a barrel.