The JSE all-share index closing the day at 70 559 from its opening price of 71 015.
On Tuesday the South African equity markets saw African Dawn Capital Ltd. (ADW) being the biggest loser of the day with a -33.33% loss moving from R0.09 to close the day at R0.09, whilst Luxe Holdings Ltd. (LUX) saw a 54.31% gain moving from R1.16 to R1.79, making it the biggest winner in the equity market
The US Dollar Index holds on at 16-mth highs; Strong set of US data yesterday GDP (2.1%) up a tick but missed by a tick, Claims (199k) at 52-yr low, PCE (0.4% m/m & 4.1% y/y), in-line & largest since Jan.1991, along with a big beat (5.9%) for GDP Price index, Durable Goods (0.5%) in-line, Personal Spending (1.3%) a big beat, Personal Income (0.5%) a beat, Trade balance a big beat (14.6%) on strong Exports, Inventories (-2.2%) a big miss, but shows demand is strong. Consumer Sentiment a beat and New Home Sales flat (745K) and missed.
Stocks & Yields pushed higher, Oil held onto gains and Gold tested 3-week lows.
The FOMC Minutes showed (1) there could be a faster taper than the $15bn/mth currently planned, (2) Inflation could indeed be “persistent” (3) Clear division over 2022/23 rate hike cycle, Doves hold sway for now.
US Yields 10yr trades at 1.644%, down from yesterday’s 1.694% high.
Equities – Gains into the Holiday USA500 +10.76 (0.23%) at 4701 – USA500.F trades higher at 4713.
USOil – peaked at $78.53 Inventories +1.0 vs -1.7 weakened prices – now at $77.65
Gold found a floor at 1782, but struggles to recoup $1800 at $1790.
JPY PPI (1.0%) hit a 10-yr high, German GDP and consumer confidence both missed (1.7% vs 1.8% and -1.6% vs -1.0%) respectively.
December 10-yr Bund future up 16 ticks, while US futures are slightly in the red. Bunds already outperformed yesterday, as EZ spreads widened in the wake of hawkish leaning ECB comments & confirmation that German finance ministry will go to the liberal FDP, which likely means more resistance to debt mutualisation across the EZ & more pressure on ECB to limit asset purchases. DAX & FTSE 100 futures are currently up 0.4% & 0.3% respectively & US futures are posting gains of 0.3-0.4%, suggesting markets are coping quite well with the prospect of less accommodative policies. Indeed, it seems to an extent that they welcome the CB’s acknowledgement that inflation risks could be less temporary than previously thought.
-Hotforex Head Market Analyst, Stuart Cowell
Things to watch today
Bank of Korea Financial Stability Board Meeting, Germany Gross Domestic Product (GDP) QoQ, South Africa Producer Price Index (PPI) MoM, ECB Publishes Account of Monetary Policy Meeting, European Central Bank President Lagarde Speaks, Bank of England Governor Bailey Speaks, Bank of England (BoE) Monetary Policy Committee (MPC) Member Haskel Speaks.
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