JSE ahead, with focus on US inflation data

The JSE closed firmer on Monday along with its global peers as investors looked ahead to US inflation numbers due this week.

January’s consumer price index (CPI) report will be released on Tuesday. On Friday, the December CPI was revised to a 0.2% increase from a 0.3% increase initially reported.

Core inflation figures, excluding food and energy, were the same.

The revised December CPI helped market sentiment ahead of the January report. Tuesday’s report will give investors their first insight into how cool inflation is running in 2024 and, alongside an update on consumer spending, will set expectations for the timing and pace of US Federal Reserve interest rate cuts this year, Bloomberg reported.

Investors were initially pricing in the first interest rate cut in March, but several Fed officials, including chair Jerome Powell, cautioned the markets that it was too soon for a rate cut.

Several members of the federal open market committee spoke at the Community Bank Conference on Monday, including governor Michelle Bowman, and presidents Tom Barkin and Neel Kashkari of Richmond and Minneapolis, respectively.

“This week the focus falls squarely on US inflation numbers. This will give markets a new sense of direction, following the recent resilient economic data coming out of the world’s largest economy,” Citadel Global director Bianca Botes said.

The JSE gained 0.41% to 73,722 points and the top 40 added 0.52%. Industrial metals rose 2.73%, resources 1.53% and banks 0.16%. Retailers lost 0.83% and food producers 0.8%.

Anglo American led gains in the industrial metals and mining sector, gaining 3.29% to R421.57. Kumba Iron Ore added 2.57% to R557.29, Afrimat 2.53% to R62.75 and Glencore 2.28% to R94.58.

At 6.20pm, the Dow Jones industrial average was 0.34% firmer at 38,803 points and the S&P 500 added 0.21%. In Europe, the FTSE 100 was little changed, while France’s CAC 40 gained 0.48% and Germany’s DAX 0.59%. Domestically, the focus now turns to the annual budget on February 21. “Investors will be keen to see how the finance minister, Enoch Godongwana, manages to balance the economy’s books as high levels of rolling blackouts return and the country continues to struggle with its rail and ports system,” RMB head of forex execution Matete Thulare said.

At 6.12pm, the rand had strengthened 0.52% to R18.9422/$, 0.73% to R20.3848/€ and 0.45% to R23.9057/£. The euro was 0.11% weaker at $1.0769.

Gold lost 0.52% to $2,013.64/oz, while platinum gained 1.42% to $887.03/oz. Brent crude was up 0.19% at $81.87 a barrel.