Flood of JSE blue-chip results due

Asian markets did not follow US markets higher on Thursday morning.

Naspers’s Hong Kong-listed associate Tencent was down 2% to HK$372.20, ignoring the Nasdaq composite index, which rose 1.17% on Wednesday after US President Donald Trump struck a truce with European Commission president Jean-Claude Juncker.

Following their meeting, Trump and Juncker said they had agreed to work to lower tariffs on both sides and to reform the World Trade Organisation.

Thursday is a busy day on the results front, with Anglo American, Anheuser-Busch InBev, British American Tobacco and Intu Properties all reporting.

It is also a busy day for economic data, with Statistics SA scheduled to release June’s producer price index (PPI) at 11.30am. Other releases from Stats SA on Thursday are May’s export and import unit value indices at 11.30am, and June’s construction materials price indices at 12pm.

The European Central Bank is expected to hold its main refinancing rate at zero and its deposit facility rate at negative 0.4% in a decision due at 1.45pm South African time.

“The European Central Bank is expected to signal its intention to keep its key interest rate below zero for at least another year on Thursday, underscoring a widening gap with the US Federal Reserve which is moving steadily toward higher interest rates,” Dow Jones reported.

The rand was trading at R13.11 to the dollar, R15.39 to the euro and R17.31 to the pound at 6.30am.

Anglo American has not released a trading update, as would be required if its earnings differed by more than 20%. According to the analysts consensus, Anglo’s earnings should rise by about 6%.

“All eyes are on whether Anglo American will give the Quellaveco copper project in Peru the final go-ahead. Deutsche Bank’s Liam Fitzpatrick said on Friday that he expects the project’s approval to push capex materially higher in 2019 and beyond,” Dow Jones said in a preview of Anglo’s results.

“Aside from the impact of currency exchange rate changes, Bernstein’s Paul Gait wonders if we will see creeping costs in labour, diesel and energy. With the miners previously in survival mode, Mr Gait wonders if some of the harsh cost cuts that were previously implemented might now have to be reversed.”

Farm and factory gate inflation, as measured by the annual change in PPI, is expected to have accelerated from May’s 4.6% to about 5.1%, tracking general inflation as measured by the annual change in the consumer price index (CPI), which rose to 4.6% in June from 4.4% in May.

“June saw another sharp rise in fuel prices of 82c a litre and 85c a litre for petrol and diesel respectively, on the back of a surge in oil prices and a weaker domestic currency, with Brent crude prices up around 10% since the beginning of January,” Investec Bank economist Lara Hodes said in her weekly note e-mailed on Monday.

“Fuel prices are not expected to abate in the coming months. Processed food price inflation, however, should continue to remain at low rates, counteracting some of the upward pressure from the fuel price grouping.”