The most significant event of the week will come on Wednesday as investors brace for the US Federal Reserve to raise its interest rates yet again. The market is pricing in an interest rate hike of 75 basis points, which will be the sixth increase this year from the Fed.
The JSE was little changed during the morning session but eked out a 0.43% gain as investors braced for the Fed’s decision. Global peers are mixed with American markets down while European stocks are trading higher and Asian markets closed mixed.
“The rhetoric from Fed Chair after the announcement will be carefully watched to see how hawkish the speech from the Fed stays,” comments TreasuryONE director Andre Cilliers.
He adds that if the Fed remains very hawkish, the dollar will continue its rally and the US Dollar Index can “back-test its recent high of 114, placing risk assets like the rand under pressure.”
The greenback is trading 1.15% stronger against the local unit at R18.35/$ having tested the R18.40 level earlier in the day. The rand is trading lower as it braces for the Fed’s rate hike decision.
In company news, S&P Global Ratings said it had raised its long-term issuer credit rating and issue rating on Sasol (-2.27%) and its debt to BB+ from BB.
Labour services group Adcorp Holdings (4.84%) reported its first revenue increase since 2018 and restored its interim dividend for the six months to the end of August. Revenue from continuing operations rose 3.2% to R5.9 billion to end-August, while margin improvement helped gross profit rise 6.3% to R626.8 million.
Adcorp’s interim dividend is 12.2 cents, which will see a payout of around R13.4 million.
