Good morning. Here is what the JSE has waiting for you today.
Overnight global mood
Wall Street ended mixed on Wednesday as investors digested stronger-than-expected inflation data out of the US, keeping rate-cut bets on ice. London followed suit with cautious trading ahead of the Bank of England decision tomorrow. Asia has opened softer this morning, spooked by higher-for-longer rate expectations globally. The JSE will open into a risk-off mood, with bond yields likely climbing before our own Reserve Bank decision lands this afternoon.
Today's big stories
Inflation print says hello to rate hikes. South Africa's June CPI came in hotter than expected, all but locking in a rate hike from the SARB today. A bigger hike is now on the cards. Get ready for your mortgage and debt servicing costs to climb. Read more.
Eskom quietly being replaced by private sector. Economist Dawie Roodt reckons the ANC's mismanagement has triggered "backdoor privatisation" - private companies are taking over the load-shedding burden Eskom and Transnet can't handle. Smart businesses get richer while SOEs stay broken. Read more.
Smart ID rollout actually working. Home Affairs has expanded the digital smart card program to 541 locations nationwide, with Absa joining the party. This is the kind of unsexy infrastructure win that doesn't grab headlines but matters for investor confidence long-term. Read more.
Sector watch
Banks will be under pressure today ahead of the SARB decision; higher rates squeeze margins in the short term but also lift net interest income eventually. Industrials tied to interest-rate-sensitive demand (property, retail) may weaken. Energy stocks and private infrastructure plays could edge higher on the "Eskom is dead, long live private power" narrative. Fixed-income traders will be glued to yields ahead of the decision announcement.
One thing to watch
The SARB decision lands at 15.00 today. The current repo rate is 8.25%. Consensus is for a 50-basis-point hike to 8.75%, but the hotter inflation print has markets pricing in a 75-basis-point move as a real possibility. That's the number that moves everything else.
