The JSE faces mixed Asian markets on Monday morning with the rand holding steady at a more than two-year high as investors digest mixed signals regarding the outlook for the global economy.
US nonfarm payrolls for May came in below expectations on Friday, helping to soothe nerves amid concerns that rising inflation in the US will prompt a tightening of monetary conditions sooner than expected.
This helped support markets, as it showed an economic recovery, but not one so strong it could prompt the US Federal Reserve to act. The Fed has pointed to a need for a sustained labour market recovery, and though wages are rising, this could be due to pandemic-induced supply side shortages, which may ease amid a vaccine rollout, said analysts.
“The conclusion for markets and the Fed is that only time will help resolve these uncertainties, playing to the view that markets are likely to remain rangebound until we know more,” said National Australia Bank analyst Rodrigo Catril in a note.
In morning trade the Hang Seng was down 0.77% and the Shanghai composite 0.21%, while Japan’s Nikkei gained 0.35%.
Tencent, which may give direction to the local market through the Naspers stable, fell 1.31%.
Gold was 0.25% weaker at $1,886.30/oz while platinum rose 0.18% to $1,168.62. Brent crude was 0.15% weaker at $71.49 a barrel.
The rand was flat at R13.42/$, having strengthened 1.4% against the dollar on Friday.
There is little on the local corporate and economic calendar on Monday, with SA’s first-quarter GDP numbers due on Tuesday. The consensus is for the data to show 3.1% quarter-on-quarter growth, though GDP is still expected to be down about 3% year on year.