JSE, rand firm, US jobs data weak

The JSE tracked firmer global markets on Wednesday with US private jobs data weaker than expected, in another sign that the labour market in the world’s biggest economy is cooling.

Private sector job creation slowed further in November and wages showed the smallest growth in more than two years, payrolls processing firm ADP reported on Wednesday.

The data shows companies added only 103,000 workers in November, slightly below the downwardly revised 106,000 in October and well below the 128,000 market estimate. The data came after the US Job Openings and Labor Turnover Survey on Tuesday showed vacancies fell to the lowest level since March 2021.

Investors will monitor jobless claims numbers on Thursday, followed by the key data on nonfarm payrolls (NFP), wages and the unemployment rate on Friday.

Economists expect the NFP report to show a 190,000 rise in November from 150,000 a month earlier, according to Bloomberg.

According to data from CME Group, traders widely expect the Fed to hold benchmark interest rate steady at its last meeting for the year next week, before possibly cutting rates in March,

“The jobs reports are pointing to a slowing US labour market, raising the prospect of a Fed rate cut in March,” said TreasuryONE currency strategist Andre Cilliers. “Market bets have climbed to more than a 50% chance of a 25 basis-point cut.”

“Markets are watching jobless claims data on Thursday, but the big one will be Friday’s payroll data.”

The JSE all share gained 0.25% to 75,400 points — most major indices were firmer — while the top 40 added 0.22%. At 6.43pm, the Dow Jones industrial average was little changed at 36,126.98, while markets in Europe ended the day firmer.

British American Tobacco led the losses on the JSE after announcing it would write down the value of some of its US cigarette brands by about $31.5bn, which amounts to about half of its market value. The share price slumped 10.08% to R532 — the biggest one-day drop in more than five years — after the company cited smokers switching to cheaper brands and a rise in illegal disposable vapes.

The rand held steady on the day, touching an intraday best of R18.8141/$. At 5.56pm, the currency was 0.27% firmer at R18.9087/$. It had strengthened 0.41% to R20.3884/€ and 0.24% to R23.7953/£. The euro was less than 0.1% weaker at $1.0787.