April consumer price inflation stays in target range

Annual headline consumer price inflation for April has moderated to 4.4% Stats SA announced on Wednesday morning, a figure in line with the expectations of economists. 

This is within the target range of between 3% and 6% set by the SA Reserve Bank, and slightly down from CPI of 4.5% in March.

On a month-on-month basis, inflation increased by 0.6%. 

Ahead of Wednesday's announcement, analysts from NKC Economics had projected inflation to stay flat at 4.5%, as did Corporate Treasury Manager at Peregrine Treasury Solutions, Bianca Botes. Inflation for goods increased by 4.2%, up from 4.1% in March. Inflation for services increased by 4.6%, down from 4.9% reported in March.

The main drivers of yearly inflation were alcoholic beverages and tobacco, transport and recreation and culture items. Senior dealer at TreasuryONE, Andre Botha, said he expects the rand's reaction to the inflation figures to be muted."

The real potential market mover could be the [US] Fed minutes that will be released this evening and the market will be looking at any indication if the Fed has changed some of their dovish feathers to more hawkish," Botha said."We expect the rand, to trade sideways in a tight range as we head into the business end of the week."

Tiger Brands profit drops 12% in wake of listeriosis outbreak

Tiger Brands said first-half profit fell as Africa’s biggest publicly traded packaged-food company battles to overcome weak economic growth and the aftermath of a deadly outbreak of listeriosis.

Earnings before one-time items dropped 12% to R7.59 a share in the six months through to March.

Sasol's US Lake Charles cost estimate jumps to $12.9 billion

Bloomberg

Sasol has increased the cost estimates for its Lake Charles Chemicals Project in Louisiana in the US to as much as $12.9bn.

That’s almost $1bn more than the company expected three months ago. Sasol said in February that capital costs at Lake Charles had increased to as much as $11.8BN and the startup would be delayed by as many as five months.

The latest estimates are at least 45% higher than earlier targets for capital expenditure.

US stock futures mixed as US-China tech news mulled

Adam Haigh, Bloomberg 

US stock futures slipped and European contracts were little changed alongside Asian equities as traders digested the latest US-China confrontations over technology. Treasuries were little changed before minutes from the Federal Reserve’s last policy meeting.

Japanese shares hit session lows and US futures dipped after reports that the Trump administration is deliberating blacklisting China’s surveillance firms.

Shares in South Korean and Hong Kong fluctuated, and Australian stocks remained near an 11-year high. They fell in Shanghai.

US stocks closed higher Tuesday after the US decided to grant limited relief for consumers and carriers that do business with Huawei.

Risk assets have been whipsawed in May as the world’s largest economies ratchet up both rhetoric and action on trade, with the latest phase focused on Huawei  and its suppliers and customers.

US President Donald Trump held off on blacklisting Huawei on concerns it could disrupt China trade talks and only took action after discussions stalled, people familiar with the talks said.

Next up are the minutes from the most recent Federal Reserve policy meeting. The central bank may have “slightly overdone it” by raising interest rates in December, though it’s premature to talk about a rate cut, said St. Louis Fed President James Bullard.

“There is a broad expectation for a growth slowdown and the trade tensions are really adding to these kinds of worries,” Jingyi Pan, Singapore-based market strategist at IG, told Bloomberg TV. “A lot of this may not have followed through to the economic data.”

Elsewhere, the pound remained volatile after UK Prime Minister Theresa May said she’s prepared to offer parliament a vote on holding a second Brexit referendum. The British currency spiked higher on her remarks before giving up those gains as some key lawmakers responded with skepticism. Crude oil retreated.