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In our continued efforts to give our readers a broad number of views, opinions and information, we continue to provide PSG's daily market updates and add our own daily rant at the end.
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Short summary of PSG's market commentary for 23 November 2018
South Africa
The JSE was in the red at the end of Thursday’s trading session as a firmer rand along with higher interest rates weighed on the local bourse, with losses from miners trimming gains made by the All Share. At 19h20 the JSE All Share closed 0.26% in the red.
United States
US markets were closed on Thursday for the Thanksgiving Day holiday.
Europe
European stocks plunged on Thursday as investor concerns over slowing global growth amid rising US interest rates and trade conflict mounted. The pan-European STOXX 600 benchmark finished 0.70% lower.
Hong Kong
Asian stock markets struggled for direction in choppy trade ahead of the Thanksgiving holiday in the US. Hong Kong stocks shed gains made in early trade, with the biggest losses coming from Chinese wireless firms. The Hang Seng closed 0.08% in the red.
Japan
Japanese stocks were flat on Thursday afternoon as positive gains made by financial and tech conglomerates were capped by less-than-inspiring earnings posted by Chinese companies. The Nikkei share average ended the day at 21 671.00 points.
Rand
The local currency struggled for direction on Thursday as the market anticipated probable volatility emanating from a simultaneous monetary policy announcement and cabinet reshuffle. At 19h10 the rand traded R13.73 against the dollar.
Precious metals
Gold prices went up on Thursday in a weak dollar environment as investors sought refuge from weakness in financial markets on economic growth concerns. Spot gold was up 0.15% at $1 227.85 an ounce.
Oil
Oil prices took a knock on Thursday after US crude inventories surged on track for their highest level in almost a year, fuelling concerns over an excessively abundant supply of oil. At 19h00 benchmark Brent crude was trading at $63.03 a barrel.
The JSE was in the red at the end of Thursday’s trading session as a firmer rand along with higher interest rates weighed on the local bourse, with losses from miners trimming gains made by the All Share. At 19h20 the JSE All Share closed 0.26% in the red.
United States
US markets were closed on Thursday for the Thanksgiving Day holiday.
Europe
European stocks plunged on Thursday as investor concerns over slowing global growth amid rising US interest rates and trade conflict mounted. The pan-European STOXX 600 benchmark finished 0.70% lower.
Hong Kong
Asian stock markets struggled for direction in choppy trade ahead of the Thanksgiving holiday in the US. Hong Kong stocks shed gains made in early trade, with the biggest losses coming from Chinese wireless firms. The Hang Seng closed 0.08% in the red.
Japan
Japanese stocks were flat on Thursday afternoon as positive gains made by financial and tech conglomerates were capped by less-than-inspiring earnings posted by Chinese companies. The Nikkei share average ended the day at 21 671.00 points.
Rand
The local currency struggled for direction on Thursday as the market anticipated probable volatility emanating from a simultaneous monetary policy announcement and cabinet reshuffle. At 19h10 the rand traded R13.73 against the dollar.
Precious metals
Gold prices went up on Thursday in a weak dollar environment as investors sought refuge from weakness in financial markets on economic growth concerns. Spot gold was up 0.15% at $1 227.85 an ounce.
Oil
Oil prices took a knock on Thursday after US crude inventories surged on track for their highest level in almost a year, fuelling concerns over an excessively abundant supply of oil. At 19h00 benchmark Brent crude was trading at $63.03 a barrel.
Our daily rant..
So the South African Reserve Bank (SARB) monetary policy committee (MPC) decided to increase interest rates by 25 basis points from 6.5% to 6.75%. Definitely not the right decision according to us. With inflation forecasts and expectations well within the SARB's 3% to 6% target band there was no need to raise interest rates when inflationary pressures such as higher oil price and weaker Rand are temporary shocks and underlying inflation increases are not caused by consumers but external factors.
We stated the following yesterday in our daily rant:
"We showed yesterday that according to Taylor's rule South Africa's interest rates are to high already and this provides a reason for why the MPC should not increase interest rates. But South Africa's inflation rate as announced yesterday came in at 5.1%, edging closer to the SARB's 3% to 6% inflation target. 21 economists and analysts polled by Bloomberg were divided. 11 of the 21 predicted a 25 basis point interest rate hike, while 10 predicted no change in interest rates. Keep an eye and ear out for the MPC statement on interest rates around 3pm this afternoon.
Ps we are predicting a no change in interest rates, but its a very close call between no change and a 25 basis point interest rate hike."
We stated the following yesterday in our daily rant:
"We showed yesterday that according to Taylor's rule South Africa's interest rates are to high already and this provides a reason for why the MPC should not increase interest rates. But South Africa's inflation rate as announced yesterday came in at 5.1%, edging closer to the SARB's 3% to 6% inflation target. 21 economists and analysts polled by Bloomberg were divided. 11 of the 21 predicted a 25 basis point interest rate hike, while 10 predicted no change in interest rates. Keep an eye and ear out for the MPC statement on interest rates around 3pm this afternoon.
Ps we are predicting a no change in interest rates, but its a very close call between no change and a 25 basis point interest rate hike."