The JSE looks set to start to mostly weaker Asian markets on Friday morning, with investors having reasons to sit on the sidelines ahead of a key US inflation report later.
Economists expect US consumer inflation to remain steady at about 8.3% year on year in May, but there are hopes that inflation is peaking in the world’s largest economy, and a higher print could spark a severe sell-off. The data is due at 2.30pm SA time.
“Markets have been tying themselves up in knots over this all week, thanks to a thin data calendar,” said Oanda senior market analyst Jeffrey Halley in a note. US markets were facing a binary outcome regarding the data, and lower than expected inflation should allow investors to pare their expectations about next week’s Federal Reserve announcement, he said.
Markets are also digesting the outcome of the European Central Bank (ECB) policy announcement, with that bank signalling multiple interest rate hikes are on their way on Thursday, which put European stocks under pressure.
The JSE fell almost 1.5% on Thursday, with precious metals miners under particular pressure, and the local bourse will need to add about 2,000 points on Friday, or 2.9%, to reach last week’s close.
In morning trade Japan’s Nikkei was down 1.24%, Australia’s All Ordinaries index 1.01% and the Hang Seng 0.11%, while the Shanghai Composite had added 0.58%.
Tencent, influential to the JSE via the Naspers stable, had edged up 0.15%.
Gold was little changed at $1,845.92/oz while platinum had lost 0.31% to $966. Brent crude was 0.48% weaker at $122.23 a barrel.
The rand was 0.14% weaker at R15.46/$, having slumped 1.39% on Thursday, amid weak local mining and manufacturing data for April, and the ECB announcement.
The local economic calendar is bare on Friday, while in corporate news fashion group TFG is due to report a surge in earnings for its year to end-March, saying in a recent trading update sales were up almost a third during the year and that it experienced a strong recovery from Covid-19.