MONEY LIVE | Rand at best level in 6 weeks after US inflation surprise.
South Africa's mining production fell by 8% in the year to June, Statistics SA reported. Gold output slumped by almost 29%, while platinum group metals were down 10%. Coal production fell 6%.
By lunchtime on Thursday, the rand was traded at R16.17/$, after reaching R16.14 earlier in the day - its best level since end-June. In July, the rand slumped to a low of R17.24/$. Fed policymakers sought to temper any expectations of significantly looser policy, with Neal Kashkari telling a conference on Wednesday that the central bank was"far, far away from declaring victory" on inflation.
Asian markets rallied Thursday as investors breathed a sigh of relief after data showed US inflation finally easing from a four-decade high, giving the Federal Reserve some room to slow down its pace of interest rate hikes. The positive energy from New York filtered through to Asia, where Hong Kong, Seoul, Taipei and Manila all rose more than one percent, while Shanghai, Sydney, Singapore, Wellington and Jakarta were also well up.
Meanwhile, Fed officials were out trying to temper expectations that they might start reducing borrowing costs as soon as next year. "However, the Fed will doubtless be focused on the signs about underlying inflation, particularly against a very tight-looking labour market." But the consumer price index was unchanged compared to June, well below expectations, while CPI excluding volatile food and energy goods rose just 0.3 percent - the smallest in four months - the Labour Department reported.
Germany will offer tax relief worth 10 billion euros to help families cope with soaring inflation, Finance Minister Christian Lindner said Wednesday. The package will raise base tax-free allowance as well as bring up the level from which the top income tax rate of 42 percent will apply. Families will also benefit from higher tax exemptions for dependent children.Quilter's assets under management and administration fell to the lowest levels since it listed on the JSE this June.
"Operating conditions in the first six months of 2022 have been challenging. Global equity markets have experienced one of the worst periods of negative performance in recent years," said Quilter CEO Paul Feeney. In an update for the six months ended in June, Jubilee highlighted how the investment has reshaped the company, expanding production across PGMs, chrome, copper and cobalt, and laying the platform for the expected growth during the 2023 financial year.
In Zambia, copper production increased 14% to 1 388 tons as the commissioning of the new Roan copper concentrator and ramp-up of operations reached 80% of design capacity in August.Nedbank has reported a 27% jump in headline earnings to R6.7 billion for the six months to end-June.The jump was mostly driven by strong revenue growth of 11% to R30.5 billion, supported by a growing client base. Its credit loss ratio remained flat at 85 basis points from the previous year.
"The will need to make sure inflation moves back towards target sustainably before contemplating pausing its tightening cycle," Carol Kong, of Commonwealth Bank of Australia, said. Chip-maker Micron became the latest, saying revenue would likely come in at the low end of its forecasts in the fourth quarter owing to weak demand. That came a day after rival Nvidia unveiled disappointing results.
Oil prices were flat but remained around six-month lows, even after news that supplies from Russia to three European countries through Ukraine had been halted as sanctions prohibited the processing of the transit payment. "The macro calendar is quiet this week with US inflation data being the main highlight," said Forex.com analyst Fawad Razaqzada.
Oil prices gained, making good some of the losses from last week, when a rise in US crude stockpiles was partly responsible for a 10-percent drop in prices. Iran on Sunday demanded that the UN nuclear watchdog, the International Atomic Energy Agency,"completely" resolve outstanding issues, as talks resume to revive a 2015 deal to rein in Tehran's nuclear ambitions.
Mpact attributed its strong performance to strong local demand, which it expects will continue, and sales growth of new products. "Input costs … have continued to escalate since the end of June 2022, putting further pressure on margins. Discussions are underway with paper customers regarding selling price increases to be implemented in October 2022," Mpact said in its results on Monday.
Now, speculation is growing that the Fed will have to announce a third successive 75 basis-point increase next month, particularly as officials have said their decisions will be data-dependent. The"report seems very unlikely to offer 'compelling evidence' of a slowdown needed for the Fed to pull away from its aggressive inflation-fighting mode." Innes added.
Bets on a recession across leading economies continued to weigh on oil prices as investors worry about the impact on demand -- figures last week indicated Americans were driving less now than in summer 2020 at the height of the pandemic. "It has been a privilege to have served Raubex as a non-executive director, and for the past five years, chairman. I have watched Raubex grow immensely during my tenure and I am proud of the role Raubex has played in building the South African economy.
"Disquietingly, globalisation of inflation is coinciding with de-globalisation of trade. The pandemic and the war have ignited tendencies towards greater fragmentation." Das said the rupee has fared"much better" than other emerging market currencies and"moved in a relatively orderly fashion, depreciating 4.7 percent against the US dollar" since April 1.
The RBI retained its growth forecast at 7.2 percent for the 2022-23 financial year and retained its inflation forecast at 6.7 percent. Free cash flow increased to $471 million compared to an outflow of $25 million in the same period last year and adjusted net debt dropped 13% to $740 million. Implats’ basic earnings for the period are expected to decrease by between 29% and 35% to be between R30.5 billion and R33.5 billion while earnings per share are expected to decrease by between 33% and 39% to be between R36.69 and R40.30 cents per share.
Marula delivered a record performance in the period, while Zimplats sustained production levels despite a complex operating environment and increased project activity.Asian equities mostly rose Friday as a drop in oil prices to pre-Ukraine war levels stirred hopes of a slowdown in inflation and central bank interest rate hikes, while focus turns to key US jobs data later in the day.
"The recent fall in oil prices, which are now trading below the levels immediately before Russia's invasion of Ukraine, has contributed to the market's perception that inflation is likely to peak soon, taking pressure off the Fed to raise rates as aggressively," said National Australia Bank's Rodrigo Catril.
And SPI Asset Management's Stephen Innes said:"Though some high-frequency data suggest employment and inflation have softened in some parts of the economy, markets may wonder if they are soft enough to change the course for the Fed." While Taipei did not say where the missiles landed or whether they flew over the island, Japan said that of the nine missiles it had detected, four were"believed to have flown over Taiwan's main island".
The BoE's Monetary Policy Committee voted 8-1 to lift its key rate by 0.50 percentage points to 1.75 percent, it said in a statement, making borrowing more expensive during a cost-of-living crisis. "That largely reflects a near-doubling in wholesale gas prices since May, owing to Russia's restriction of gas supplies to Europe and the risk of further curbs.
The drop in oil prices came despite a move by the OPEC+ oil cartel, led by Saudi Arabia and Russia, to undertake just a small increase in production. The synthetic fuels and chemicals group on Thursday said itexpects adjusted earnings for the year to increase by between 36% and 56% tobetween R66 billion and R75.6 billion.
Earnings per share are expected to be between R60.59 and R63.51 – an increase of more than 100% compared to the prior year earnings per share of R14.57. Headline earnings per share are expected to be between R42.84 and R50.74 compared to R39.53 in the previous year and representing an increase by between 8% and 28%.
All eyes are now on the release of US jobs data Friday, which will provide the latest snapshot of the economy and could help guide the Federal Reserve in its debate on monetary policy. "But for stock investors, lower oil prices are a pleasure to behold as not only did the US 10-year yields drop but sliding oil prices also downshifted inflation expectations, supporting that slower hiking pace thesis."
United States Latest News, United States Headlines
Similar News:You can also read news stories similar to this one that we have collected from other news sources.
MARKET WRAP: JSE snaps four-session winning streakAll share closes down but rand benefits from US inflation data
Read more »
Market Watcher: Has US inflation peaked?[MARKET WATCHER] Sasfin’s DavidShapiro discusses the market’s reaction to US inflation data, the rand’s movements, and Nedbank’s results.
Read more »
Relief over US inflation drives rand up the most since 2017Below-forecast US inflation data prompts bets that the Federal Reserve will slow the pace of hikes, boosting emerging market currencies
Read more »
SONGEZO ZIBI | A 3.5% jobless rate and Biden is still in trouble. Take note, SAWhen our country’s inflation is so well controlled, it is easy to take the impact of rising cost of living for granted
Read more »