JSE likely to take lead from weaker Asian markets on Wednesday

The JSE could take its lead from weaker Asian markets on Wednesday morning, ahead of what may be significant volatility in the rand as investors eye both local and international economic developments.

Local focus is on the medium-term budget policy statement (MTBPS) later, and the size of the government’s budget deficit is anxiously awaited ahead of the latest review by Moody’s Investors Service on Friday.

International focus is on the US Federal Reserve, with markets pricing in a 94% chance of a 25 basis point cut, which would be the third cut from the world’s most influential bank in 2019.

“The last time we had a series of back-to-back moves this long was in 2008,” said BK Asset Management MD of foreign exchange strategy Kathy Lien. “We know from the last policy meeting that the Fed is divided and there’s a subset of policymakers who do not believe further easing is necessary,” she said.

At 6.10am the Shanghai Composite was down 0.44% and Hong Kong’s Hang Seng had lost 0.25%.

Tencent was up 0.3% in Hong Kong.

Gold was flat at $1,488.80/oz and platinum little changed at $920.03. Brent crude was 0.32% lower at $61.36 a barrel.

The rand was flat at R14.634/$.

Ascendis Health is expected to report a decline in headline earnings per share (HEPS) for its year to end-June later, having warned earlier in October that it had seen declining revenue across all its business segments, with the exception of Animal Health.

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