JSE firms as global sentiment improves

The JSE rose the most in more than two months on Wednesday, tracking firmer global markets after US jobs numbers came in better than expected. ADP private payrolls data showed employers added 140,000 jobs in February.

The report comes ahead of the closely watched nonfarm payroll report due on Friday. A lower reading than January’s stronger-than-anticipated data could give investors hope that the US Federal Reserve (Fed) could cut rates sooner.

Meanwhile, Fed chair Jerome Powell is set to appear before Congress for his semiannual testimony on monetary policy.

In his prepared remarks that were released ahead of his appearance before the House committee on financial services, he reiterated that the central bank would need to see sustainable price stability before it turned to rate cuts.

The prepared remarks also showed Powell believed interest rates were likely to be at their peak, and cuts were likely to come “at some point this year”, assuming the economy continued to cool off, he added.

Investors will listen closely for any deviation by Powell from Fed policymakers’ oft-repeated message that there is no rush to cut interest rates. Prepared testimony published showed Powell planned to tell legislators that rate cuts were likely to be warranted “at some point” in 2024. Investors will look for more clarity on this issue as Powell fields questions from legislators over the next two days, Bloomberg reported.

“Investors are interpreting Powell’s prepared remarks as interest rate cuts are still possible later, possibly at the second half of the year,” FXTM senior research analyst Lukman Otunuga said. “However, more clarity is needed and investors will hang on to Powell’s every word for further clues.”

The JSE all share gained 1.85% to 73,578 points, pushed higher by all major indices, while the top 40 rose 2.05%.

At 6.10pm, the Dow Jones industrial average was 0.62% firmer at 38,800 points, while markets were also firm in Europe.

The rand kept steady below R19 to the dollar for the second consecutive session on the day, touching the intraday best of R18.7875/$. At 6.10pm, the rand had strengthened 0.78% to R18.822/$, 0.29% to R20.5221/€ and 0.47% to R23.9807/£. The euro was 0.44% firmer at $1.0903.

Gold gained 0.88% to $2,146.22/oz, while platinum rose 3.17% to $906.34/oz. Brent crude added 2.58% to $83.96 a barrel.