South African financial markets record new record highs

EQUITIES on the JSE, precious metal prices and Rand on Friday ended stronger for the third consecutive week. Despite the higher-than-expected US inflation rate for August that was released on Thursday, sentiment on global markets remains that the Federal Reserve will decrease its Bank rate this Wednesday September 17.

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The US core inflation did increase from 2.7% in July to 2.9% August as was expected by markets, but is now significantly higher than the 2.0% inflation target of the Fed.

Prices increased were felt mostly for food (3.2% vs 2.9% in July), used cars and trucks experienced a sharp annual increase of 6.0% against the 4.6% in July and the yearly acceleration for new vehicles was 0.7% against 0.4% the previous month.

Evidence suggests that the higher tariffs that were introduced by the Trump administration at the beginning of last month contributes to these sharp increases.