Economic information that works for you ResearchWeeklyCommentsResearch NotesAd-Hoc researchS.E.EStellenbosch Working Paper Series BER Weekly (Archive) Short report that reviews important global and domestic financial market and economic data developments of the past week. The BER Weekly is released on Monday mornings. 2019 2018 2017 2016 2015 2014 2013 BER Weekly, 11 November 2019 Last updated: Nov 11 2019 10:45AM Notwithstanding the apparent optimism surrounding President Cyril Ramaphosa’s second Investment Conference last week, economic data released for Q3 disappointed. The consumer turned notably more pessimistic during the quarter, while the latest activity data read moreNotwithstanding the apparent optimism surrounding President Cyril Ramaphosa’s second Investment Conference last week, economic data released for Q3 disappointed. The consumer turned notably more pessimistic during the quarter, while the latest activity data from the country’s secondary sector also paints a dismal picture for GDP. On the global front, the focus was on the latest trade data from the US, China and Germany. The data came against a backdrop of increased optimism about the possibility of a preliminary trade deal being reached between the world’s two largest economies. BER Weekly, 4 November 2019 Last updated: Nov 4 2019 10:51AM The Medium Term Budget Policy Statement (MTBPS) dominated domestic headlines for most of last week. The overall message was that the fiscus (and the economy) is under more pressure than when the budget was tabled in February. In the absence of substantial read moreThe Medium Term Budget Policy Statement (MTBPS) dominated domestic headlines for most of last week. The overall message was that the fiscus (and the economy) is under more pressure than when the budget was tabled in February. In the absence of substantial corrective measures (mainly on government expenditure), key fiscal metrics are projected to worsen notably over the next few years. The weaker fiscal position was an important contributor to Moody’s decision after the close of financial markets on Friday to lower its outlook for SA’s credit rating to negative from stable. BER Weekly, 28 October 2019 Last updated: Oct 28 2019 10:43AM On the domestic front, the only notable data release was consumer inflation for September. While the benign inflation print and weak domestic GDP growth support another interest rate cut, the South African Reserve Bank (SARB) could be hesitant to cut rates – read moreOn the domestic front, the only notable data release was consumer inflation for September. While the benign inflation print and weak domestic GDP growth support another interest rate cut, the South African Reserve Bank (SARB) could be hesitant to cut rates – see the domestic section. In the international section, the interest rate decision by the European Central Bank (ECB) is discussed as well as the latest Purchasing Managers’ Index (PMI) prints from the Eurozone and US. In contrast with last week’s light calendar, this week will be busy on both the domestic and international front. Domestically, the focus will be on the Medium Term Budget Policy Statement (MTBPS) to be presented by Finance Minister Tito Mboweni on Wednesday. Internationally, final PMI figures for September, Q3 GDP estimates from Europe and the US, as well as the policy interest rate decision by the US Federal Reserve will be in focus. BER Weekly, 21 October 2019 Last updated: Oct 21 2019 11:20AM The return of load shedding last week could put a damper on the GDP growth performance in 2019Q4 as it did in 2019Q1. However, the magnitude of the economic impact will depend on the duration and severity of the rolling blackouts. According to Eskom, no load read moreThe return of load shedding last week could put a damper on the GDP growth performance in 2019Q4 as it did in 2019Q1. However, the magnitude of the economic impact will depend on the duration and severity of the rolling blackouts. According to Eskom, no load shedding is planned for this week, but this could change at any moment. Coincidentally, the newest round of load shedding started a few days before the publication of the updated Integrated Resource Plan (IRP), the blueprint for South Africa’s future energy mix. BER Weekly, 14 October 2019 Last updated: Oct 14 2019 10:23AM While incoming data on the global economy remains downbeat, the mood was lifted last week after progress was made on US-China trade talks and Brexit negotiations. On the domestic data front, mining and manufacturing data for August added to growing evidence read moreWhile incoming data on the global economy remains downbeat, the mood was lifted last week after progress was made on US-China trade talks and Brexit negotiations. On the domestic data front, mining and manufacturing data for August added to growing evidence that real GDP growth likely slowed significantly in 2019Q3 after the nice rebound recorded in Q2. In fact, our latest forecast is for GDP growth of only 0.2% q-o-q (annualised), or 0.4% y-o-y in the third quarter, with full-year growth pencilled in at a meagre 0.4%. In international news, ongoing trade tensions continue to disrupt global trade flows and weigh on overall sentiment, with export-oriented economies in particular feeling the strain. To that end, the international section unpacks the latest trade statistics for Germany, the UK and China, while also taking a look at the latest survey data from China and the US. BER Weekly, 7 October 2019 Last updated: Oct 7 2019 10:40AM Heightened concern about global GDP growth after the release of some weak US data fuelled financial market volatility last week. On the domestic front, incoming data prints point to persistent weakness in the domestic economy during 2019Q3. The Absa read moreHeightened concern about global GDP growth after the release of some weak US data fuelled financial market volatility last week. On the domestic front, incoming data prints point to persistent weakness in the domestic economy during 2019Q3. The Absa Purchasing Managers’ Index (PMI) declined for a second consecutive month, falling deep into contractionary territory. Additionally, new vehicle sales remained subdued in September, while credit growth moderated and electricity output suffered a second monthly decline in August. Compounding the domestic frailties is the fact that the global economy is showing even more signs of slowing. Services PMIs followed manufacturing prints lower across most of the developed world in September, while ongoing trade disputes and uncertainty around Brexit continue to weigh on sentiment and activity. BER Weekly, 30 September 2019 Last updated: Sep 30 2019 11:52AM Notwithstanding the release of a fair bit of domestic data last week, domestic financial markets were once again dominated by swings in global risk sentiment. It was an eventful week on the global political front, with a unanimous UK Supreme Court ruling that read moreNotwithstanding the release of a fair bit of domestic data last week, domestic financial markets were once again dominated by swings in global risk sentiment. It was an eventful week on the global political front, with a unanimous UK Supreme Court ruling that Boris Johnson’s suspension of the UK Parliament for five weeks was unlawful. Across the Atlantic, US House Speaker Nancy Pelosi set the ball rolling on an enquiry into whether impeachment charges should be brought against President Donald Trump. The week ended with a further escalation in tensions between the US and China. These events weighed on emerging market assets, including the rand exchange rate. On the domestic data front, price and wage pressures remain subdued, as indicated by the latest producer price index (PPI) and employment statistics. This concurs with weak growth in the formal employment numbers during the second quarter. Internationally, an array of flash Purchasing Managers’ Indices (PMIs) shed the first light on the performance of the real economy during September. Overall, the ongoing slowdown in the Eurozone intensified while the US and China remain on a firmer footing. BER Weekly, 23 September 2019 Last updated: Sep 23 2019 11:23AM Various central banks, including the South African Reserve Bank (SARB), announced their latest interest rate decisions last week. Globally, the most important announcement was from the Federal Reserve (Fed) in the US, which reduced its policy interest rate read moreVarious central banks, including the South African Reserve Bank (SARB), announced their latest interest rate decisions last week. Globally, the most important announcement was from the Federal Reserve (Fed) in the US, which reduced its policy interest rate range by 25 basis points (bps). Some emerging market banks also reduced their key rates, such as Brazil and Indonesia. Financial markets anticipated the Fed’s announcement and the reaction was muted. In contrast to the global easing of rates, the SARB announced no change to the repurchase rate. To us this was somewhat disappointing (although not surprising) given the downward adjustment of the central bank’s growth outlook amid a stable inflation backdrop. Besides the inflation data for August, domestic retail and wholesale trade numbers for July were also released. BER Weekly, 16 September 2019 Last updated: Sep 16 2019 10:42AM Despite weak incoming SA data for 2019Q3, the rand exchange rate and JSE benefitted from a global investor rotation in favour of riskier asset classes (see the markets section) last week. This was aided by the European Central Bank (ECB) announcing a widely read moreDespite weak incoming SA data for 2019Q3, the rand exchange rate and JSE benefitted from a global investor rotation in favour of riskier asset classes (see the markets section) last week. This was aided by the European Central Bank (ECB) announcing a widely expected stimulus package (for more, click here) and the US slightly delaying the imposition of the next round of tariff hikes on Chinese goods. However, an attack on a Saudi oil facility over the weekend saw risk sentiment intensify once more. BER Weekly, 9 September 2019 Last updated: Sep 9 2019 11:58AM Despite a terrible week of unrest in SA, the rand exchange rate and the JSE posted solid gains. Partly, this was in reaction to better-than-expected Q2 GDP data, but also an improvement in global risk sentiment on indications that the US and China will meet read moreDespite a terrible week of unrest in SA, the rand exchange rate and the JSE posted solid gains. Partly, this was in reaction to better-than-expected Q2 GDP data, but also an improvement in global risk sentiment on indications that the US and China will meet in October to try and resolve the trade dispute. On the international front, Chinese trade data underperformed in August, especially exports to the US. BER Weekly, 2 September 2019 Last updated: Sep 2 2019 11:12AM The domestic section unpacks three different data releases covering July, namely trade data, factory-gate inflation, and private section credit extension, as well as the Absa Purchasing Managers’ Index (PMI) for August. The trade account slid back into a read moreThe domestic section unpacks three different data releases covering July, namely trade data, factory-gate inflation, and private section credit extension, as well as the Absa Purchasing Managers’ Index (PMI) for August. The trade account slid back into a deficit after managing to record three consecutive surplus readings, while inflation came in lower than expected. This week, all eyes will be on the Q2 GDP release due tomorrow. BER clients will receive a detailed comment about the GDP print during the day. The international section provides an update on consumer confidence figures from across the globe with the US reading falling sharply in August. The section also looks at this morning’s Chinese PMI data and provides an update on the latest data from Germany. Finally, the markets section unpacks the recent movements of the rand exchange rate, which, pushed by global as well as local factors, traded above R15.40/$ mid-week. BER Weekly, 26 August 2019 Last updated: Aug 26 2019 10:21AM The domestic economic data calendar was light last week, with consumer inflation being the most important release. Inflation came in lower than expected, supporting our (out of consensus) view that the central bank may still have some room to cut the repo read moreThe domestic economic data calendar was light last week, with consumer inflation being the most important release. Inflation came in lower than expected, supporting our (out of consensus) view that the central bank may still have some room to cut the repo rate further at its next meeting in September. On the global growth front, concerns about the outlook for world growth intensified at the end of last week and over the weekend with a further escalation of tit-for-tat tariff hike announcements between the US and China. Regarding international data releases, the focus was on the latest flash Purchasing Managers’ Index (PMI) data from the Eurozone and the US. In both cases, manufacturing indicators are now below the neutral 50-point mark. BER Weekly, 19 August 2019 Last updated: Aug 19 2019 11:17AM We hosted a briefing to clients in Johannesburg with an impressive line-up of speakers attempting to unpack the political and economic environment in SA. The domestic section provides a brief overview of some of the main points of discussion. On the data read moreWe hosted a briefing to clients in Johannesburg with an impressive line-up of speakers attempting to unpack the political and economic environment in SA. The domestic section provides a brief overview of some of the main points of discussion. On the data front, retail sales for June surprised on the upside, providing additional evidence that the SA economy likely returned to growth in 2019Q2. On the international front, we unpack the latest industrial production figures from China and the US. The latest data supports the view that Chinese growth is likely to slow further in 2019H2. BER Weekly, 12 August 2019 Last updated: Aug 12 2019 10:27AM On the domestic front, data on mining and manufacturing output for June was released, completing the picture for 2019Q2. In all, both mining and manufacturing output expanded on a quarterly basis, suggesting that GDP could recover somewhat from the weak read moreOn the domestic front, data on mining and manufacturing output for June was released, completing the picture for 2019Q2. In all, both mining and manufacturing output expanded on a quarterly basis, suggesting that GDP could recover somewhat from the weak figures posted in Q1. In international news, escalating trade tensions between the US and China and persistent uncertainty around Brexit continued to weigh on expectations for global growth. These concerns were reflected in major financial market volatility amid general risk-off sentiment, and continue to support the dovish turn in global central bank policy actions. BER Weekly, 5 August 2019 Last updated: Aug 5 2019 10:21AM Treasury revenue and expenditure data for the first fiscal quarter, released last week, have strengthened the argument that SA’s public finances are in a dire position – at least compared to budget projections in February. This is especially true from the read moreTreasury revenue and expenditure data for the first fiscal quarter, released last week, have strengthened the argument that SA’s public finances are in a dire position – at least compared to budget projections in February. This is especially true from the revenue side. Meanwhile, domestic economic data painted a mixed picture. While the unemployment rate rose to a multi-year high, vehicle exports and the Absa Purchasing Manager’s Index (PMI) for July were noticeably upbeat. BER Weekly, 29 July 2019 Last updated: Jul 29 2019 10:49AM Domestic financial markets were dominated by the reaction of credit rating agencies to Finance Minister Tito Mboweni’s announcement that Eskom will receive an additional R59 billion (bn) bailout. This will be spread over the 2019/20 (R26bn) and 2020/21 read moreDomestic financial markets were dominated by the reaction of credit rating agencies to Finance Minister Tito Mboweni’s announcement that Eskom will receive an additional R59 billion (bn) bailout. This will be spread over the 2019/20 (R26bn) and 2020/21 (R33bn) fiscal years. Combined with the R23bn per annum committed to Eskom in the February budget, the latest bailout means Eskom will receive R105bn in government support through 2020/21. This news overshadowed domestic data releases showing moderate consumer and producer inflation for June. While the additional bailout is positive for Eskom, it places a further drain on the fiscus. Indeed, both Moody’s and Fitch saw the news as negative for SA’s sovereign credit rating outlook. While Moody’s did not pronounce on the actual rating or outlook (see domestic section below), Fitch revised the outlook on its BB+ foreign and local currency rating to negative from stable. This is the first step towards Fitch cutting SA’s rating a further notch into sub-investment territory. Besides the large Eskom bailout, the outlook revision was justified on the grounds of SA’s sustained poor real GDP growth performance and the likely subsequent government revenue underperformance. Fitch also raised concerns about SA’s growth potential, and now expects a consolidated budget deficit of 6.3% of GDP in 2019/20. The impact of the rating agency pronouncements on the rand exchange rate and government bond rates is discussed in the markets section. Internationally, the European Central Bank (ECB) kept monetary policy unchanged last week, but expressed the intention to relax policy going forward. Meanwhile, the manufacturing Purchasing Managers’ Indices (PMIs) in both the Eurozone and the US fell to multi-year lows, continuing the trend in recent months of slowing industrial activity. Key events this week include Eskom’s financial results presentation tomorrow and the US Fed interest rate decision on Wednesday. The Fed is widely expected to cut the policy rate by 25bps. Attention will be focused on the tone of the accompanying statement, especially the extent to which the Fed signals further monetary policy easing down the line. BER Weekly, 22 July 2019 Last updated: Jul 22 2019 9:51AM The big domestic economic news last week was the 25 basis points (bps) cut in the repo rate while the big corporate news of the week was the announcement on Friday that US-based PepsiCo had reached an agreement with SA food company Pioneer Foods to purchase read moreThe big domestic economic news last week was the 25 basis points (bps) cut in the repo rate while the big corporate news of the week was the announcement on Friday that US-based PepsiCo had reached an agreement with SA food company Pioneer Foods to purchase all outstanding shares in the local company in a deal worth about R24.4bn. Internationally, consumer spending in the US and UK remained robust in May while industrial production in the US came under pressure. BER Weekly, 15 July 2019 Last updated: Jul 15 2019 9:52AM Last week was relatively quiet on the domestic data front. Mining and manufacturing output were mixed, but both sectors are set to recover in 2019Q2 after a poor first quarter. This should ensure a much improved GDP print in Q2. Internationally, trade read moreLast week was relatively quiet on the domestic data front. Mining and manufacturing output were mixed, but both sectors are set to recover in 2019Q2 after a poor first quarter. This should ensure a much improved GDP print in Q2. Internationally, trade numbers in China are showing the effects of the trade dispute with the US, while economic growth in China slowed to the slowest rate in at least 27 years. Meanwhile, industrial output in the Eurozone picked up slightly in May, the first improvement in four months. In financial markets, the dollar remained under pressure as a July cut in the US policy interest rate seems ever more likely. This week, the domestic economic calendar is dominated by the SA Reserve Bank’s (SARB) Monetary Policy Committee (MPC) interest rate decision on Thursday. The combination of a further deterioration in the real GDP growth outlook since the previous MPC meeting in May, continued subdued consumer inflation prints and the dovish global monetary policy tilt towards renewed stimulus should result in a 25bps interest rate reduction. This would reduce the repo rate to 6.50% and be the first policy rate drop since March 2018. BER Weekly, 8 July 2019 Last updated: Jul 8 2019 10:20AM During last week, the rand continued to strengthen and even dipped below R14/$ mid-week. However, the tide turned after the release of better-than-expected US nonfarm payrolls figures from the US. The jobs data is discussed in the international section, along read moreDuring last week, the rand continued to strengthen and even dipped below R14/$ mid-week. However, the tide turned after the release of better-than-expected US nonfarm payrolls figures from the US. The jobs data is discussed in the international section, along with manufacturing Purchasing Managers’ Index (PMI) figures from Europe and the US. International PMIs – including the China PMI discussed last week - are broadly trending lower on the back of slowing new orders. This resulted in the global manufacturing PMI slumping to an almost seven-year low in June. The domestic focus is on the latest manufacturing PMI from South Africa, as well as vehicle sales figures in what was otherwise another quiet week on the domestic data front. Both sets of data turned out weak in June. BER Weekly, 1 July 2019 Last updated: Jul 1 2019 10:17AM It was a fairly quiet week on the domestic data front with South African financial markets dominated by the further strengthening of the rand exchange rate. In the domestic section, we unpack the latest producer price trends, labour market developments as read moreIt was a fairly quiet week on the domestic data front with South African financial markets dominated by the further strengthening of the rand exchange rate. In the domestic section, we unpack the latest producer price trends, labour market developments as well as May’s trade balance. Internationally, the focus is on a variety of data releases from Europe, US, China and Japan. Inflation data from the Eurozone and US came in well below their respective central bank’s inflation targets. This supports the recent more dovish stance by both central banks. Indeed, increased bets on pending US rate cuts contributed to a weaker dollar. This provided a welcome boost to the rand. BER Weekly, 24 June 2019 Last updated: Jun 24 2019 12:06PM Emerging market assets, including the rand exchange rate, benefitted handsomely last week from more dovish-than-expected monetary policy outlooks from the US and European central banks. If it was not for some disappointment that President Ramaphosa’s State of read moreEmerging market assets, including the rand exchange rate, benefitted handsomely last week from more dovish-than-expected monetary policy outlooks from the US and European central banks. If it was not for some disappointment that President Ramaphosa’s State of the Nation Address (SONA) lacked concrete details on how Eskom will be brought back to a sustainable financial position, domestic assets may have gained even more. On the domestic data front, the case for an interest rate cut next month was bolstered by the latest consumer inflation print for May which, while somewhat up from April, remained well contained. This, as well as some initial thoughts on the SONA, is discussed in more detail here. As mentioned, internationally the focus was on advanced country monetary policy meetings. The central banks of the US, Japan and the UK all kept their respective policy rates unchanged. However, the sentiment is becoming increasingly dovish and in the case of the US, Japan and Europe, there is a growing likelihood of an interest rate cut before the end of the year. BER Weekly, 14 June 2019 Last updated: Jun 14 2019 11:52AM Domestic economic data for April surprised on the upside this week, quelling fears of a technical recession (two consecutive quarterly contractions in GDP). However, business sentiment data suggests that the recovery may not be sustained throughout 2019Q2. read moreDomestic economic data for April surprised on the upside this week, quelling fears of a technical recession (two consecutive quarterly contractions in GDP). However, business sentiment data suggests that the recovery may not be sustained throughout 2019Q2. Meanwhile, on the international front, consumer inflation data in the US continued to make a case for an interest rate cut later this year, while data from China was mixed. BER Weekly, 10 June 2019 Last updated: Jun 10 2019 9:09AM Domestic financial markets were rattled last week after the release of much weaker-than-expected 2019Q1 GDP figures and mixed messages from the ANC on the mandate of the SA Reserve Bank (SARB). The rand exchange rate weakened significantly through the week. read moreDomestic financial markets were rattled last week after the release of much weaker-than-expected 2019Q1 GDP figures and mixed messages from the ANC on the mandate of the SA Reserve Bank (SARB). The rand exchange rate weakened significantly through the week. Incoming data for the second quarter, including vehicle sales and the Absa Purchasing Managers’ Index (PMI) figures, do not inspire confidence in a strong bounce-back in Q2 GDP. Combined, the weak data necessitated a downward adjustment to our outlook for full-year real GDP growth. On the international front we discuss the dovish turn in international monetary policy, with reference to interest rate decisions from across the globe. BER Weekly, 3 June 2019 Last updated: Jun 3 2019 9:09AM Last week, domestic market focus was on SA political developments as President Cyril Ramaphosa announced his cabinet on Wednesday evening. The cabinet was generally well received, but we remain sceptical as to the willingness and ability of the new cabinet to read moreLast week, domestic market focus was on SA political developments as President Cyril Ramaphosa announced his cabinet on Wednesday evening. The cabinet was generally well received, but we remain sceptical as to the willingness and ability of the new cabinet to deliver pro-growth policy reforms. In other domestic news, we unpack the latest FNB/BER Consumer Confidence Index (CCI), producer price inflation and trade statistics. On the international front, data releases from the US, Europe and China take centre stage. BER Weekly, 27 May 2019 Last updated: May 27 2019 7:49AM The key domestic event last week was the MPC decision on the policy interest rate. As expected, the rate was kept unchanged, but with a more dovish bias. BER Weekly, 20 May 2019 Last updated: May 20 2019 11:37AM Domestic data released last week confirmed that SA GDP most likely contracted in the first quarter, the question is how large the decline will be. The unemployment rate increased in 2019Q1, with notable job losses in the formal sector of the economy, while read moreDomestic data released last week confirmed that SA GDP most likely contracted in the first quarter, the question is how large the decline will be. The unemployment rate increased in 2019Q1, with notable job losses in the formal sector of the economy, while retail, wholesale and motor sales all contracted in the first quarter. Internationally, indications are that economic growth is also slowing down in China, while Germany experienced a slight rebound. The trade dispute between the US and China is partly to blame for China’s woes and given the current tension, could escalate and have more dire consequences. On the political front, populist parties are expected to gain more seats in the EU parliamentary elections this week. Meanwhile, in financial markets, currencies and share prices were also affected by the US-China trade tensions. BER Weekly, 13 May 2019 Last updated: May 13 2019 11:40AM The key event over the past week was the national and provincial election on 8 May. The results point to relative stability and are unpacked in the current affairs section below. Generally, the election outcome was welcomed by the markets. However, this more read moreThe key event over the past week was the national and provincial election on 8 May. The results point to relative stability and are unpacked in the current affairs section below. Generally, the election outcome was welcomed by the markets. However, this more positive sentiment was to some extent overshadowed by a further escalation of the trade tension between the US and China. As such, in the international section, the focus is on recent trade data from China and the US. The data is against the backdrop of scheduled trade negotiations between the two countries that took place last week. Talks continued despite the US imposing even higher tariffs on Chinese goods from Friday and China stating it would implement the “necessary countermeasures” in return. Finally, domestic activity data for March surprised on the upside, but still suggests that the economy is likely to contract sharply in 2019Q1. BER Weekly, 6 May 2019 Last updated: May 6 2019 11:33AM Awaiting Wednesday’s election with bated breath, we briefly unpack the latest poll results and possible implications of the vote outcome in the current affairs section below. On the data front, local vehicle sales and factory activity data showed an read moreAwaiting Wednesday’s election with bated breath, we briefly unpack the latest poll results and possible implications of the vote outcome in the current affairs section below. On the data front, local vehicle sales and factory activity data showed an improvement in April. This is a welcome development as all signs are that the economy will contract quite steeply in the first quarter of 2019. The international section looks at the US nonfarm payroll data, Eurozone growth figures as well as monetary policy decisions in the US and UK. BER Weekly, 29 April 2019 Last updated: Apr 29 2019 11:08AM It was a quiet week on the domestic data front with the main release being the 2019Q1 FNB/BER Consumer Confidence Index. After remaining elevated for most of last year, consumer confidence fell back to its long-term average in 2019Q1. This was underpinned by read moreIt was a quiet week on the domestic data front with the main release being the 2019Q1 FNB/BER Consumer Confidence Index. After remaining elevated for most of last year, consumer confidence fell back to its long-term average in 2019Q1. This was underpinned by a change in consumers’ take on the prospects for the South African economy over the next year. Internationally, while US GDP growth for the first quarter of 2019 beat expectations, the German economy continues to cool. BER Weekly, 18 April 2019 Last updated: Apr 18 2019 2:26PM Despite the shorter week, there was still some domestic data to digest, namely consumer inflation and retail sales. While inflation moved in line with the consensus predictions (albeit lower than our expectation), the outcome for retail sales beat read moreDespite the shorter week, there was still some domestic data to digest, namely consumer inflation and retail sales. While inflation moved in line with the consensus predictions (albeit lower than our expectation), the outcome for retail sales beat expectations. Nonetheless, growth in retail sales remains weak and although the March data is still outstanding, the broader internal trade category will likely be a drag on 2019Q1 GDP. On the international front, the latest US trade performance and Chinese data (including 2019Q1 GDP growth) largely fared better than expected. BER Weekly, 15 April 2019 Last updated: Apr 15 2019 11:33AM On the domestic front, incoming data for 2019Q1 continues to disappoint. The latest mining and manufacturing output data suggest that GDP growth could slow notably in Q1, with a contraction looking increasingly likely. The rand ignored the raft of read moreOn the domestic front, incoming data for 2019Q1 continues to disappoint. The latest mining and manufacturing output data suggest that GDP growth could slow notably in Q1, with a contraction looking increasingly likely. The rand ignored the raft of disappointing domestic data, strengthening to below R14/$ - more on this in the Markets section. In international news, the European Central Bank (ECB) stuck with its current accommodative monetary policy stance, suggesting that further stimulus might be on the cards should growth remain subdued. We also unpack inflation data from the US and China, as well as the latest Chinese trade statistics. BER Weekly, 8 April 2019 Last updated: Apr 8 2019 12:15PM Last week, financial markets continued to digest the ratings reprieve offered by Moody’s, with the rand ending up a clear winner – the domestic unit strengthened by almost 3% against most major currencies. Domestic data releases, however, suggest that real read moreLast week, financial markets continued to digest the ratings reprieve offered by Moody’s, with the rand ending up a clear winner – the domestic unit strengthened by almost 3% against most major currencies. Domestic data releases, however, suggest that real economic activity remains in the doldrums, with new passenger car sales and the Absa Purchasing Managers’ Index (PMI) painting a gloomy picture. On the international front, the latest data shows that the US economy continues to chug along at a healthy pace. In contrast, growth appears to be slowing in the UK and the Eurozone (EZ). This week, all eyes will once again be on the ongoing Brexit negotiations. It remains to be seen whether UK lawmakers can agree on a Brexit deal before the current departure date, set for 12 April. BER Weekly, 1 April 2019 Last updated: Apr 1 2019 11:34AM Against the general expectation, but as was the case in late 2018, Moody’s credit agency again decided to skip (as they are entitled to do) a scheduled pronouncement on SA’s sovereign credit rating on Friday. This implies that the rating remains at one notch read moreAgainst the general expectation, but as was the case in late 2018, Moody’s credit agency again decided to skip (as they are entitled to do) a scheduled pronouncement on SA’s sovereign credit rating on Friday. This implies that the rating remains at one notch above sub-investment grade, with a stable outlook. Domestic financial markets responded positively to the news this morning (see markets section). Although Moody’s reprieve is cause for relief, the current environment of weak SA real GDP growth and numerous fiscal risks (illustrated again last week by Sanral’s decision to ‘temporary’ suspend e-toll summonses) suggest that the risk of a rating outlook change and ultimately a credit downgrade will remain in the foreseeable future. Before the Moody’s decision, the Monetary Policy Committee (MPC) decided to keep the repo rate unchanged. Other domestic news included an acceleration in producer inflation, an improvement in employment numbers and a modest trade surplus in February. Internationally, the US reported a smaller trade deficit in January, while trade negotiations with China resumed last Thursday. In China, purchasing managers’ indices (PMIs) ticked up above the neutral-50 mark, while in Britain no progress has been made on the way forward regarding Brexit. BER Weekly, 25 March 2019 Last updated: Mar 25 2019 10:22AM Last week, financial markets were surprised by a more dovish-than-expected monetary policy statement from the Federal Reserve (Fed) in the US. In response, a section of the US yield curve inverted. As expected, the Bank of England (BoE) also held its policy read moreLast week, financial markets were surprised by a more dovish-than-expected monetary policy statement from the Federal Reserve (Fed) in the US. In response, a section of the US yield curve inverted. As expected, the Bank of England (BoE) also held its policy rate unchanged. Besides monetary policy, flash PMI data from key economies continue to point towards a slowdown in global growth. Domestically, the consumer and trade sector came into focus. In February, headline consumer inflation remained safely below the 4.5% midpoint of the target range. In the trade sector, real retail and wholesale sales improved marginally in January. However, nominal sales were not much higher, an indication that trade inflation was running below headline consumer inflation at the start of this year. In the week ahead, news will be dominated by Moody’s judgement of the SA economy on Friday. Read more in the current affairs section. BER Weekly, 18 March 2019 Last updated: Mar 18 2019 11:21AM Domestic economic data released last week indicates that growth momentum remained poor at the start of the year. In the domestic section, we discuss the latest reading for the RMB/BER Business Confidence Index (BCI), along with mining and manufacturing output read moreDomestic economic data released last week indicates that growth momentum remained poor at the start of the year. In the domestic section, we discuss the latest reading for the RMB/BER Business Confidence Index (BCI), along with mining and manufacturing output for January. On the international front, we briefly discuss the latest Brexit developments, as well as activity data out of China and inflation figures from the US. BER Weekly, 11 March 2019 Last updated: Mar 11 2019 10:17AM Last week, domestic growth and current account data for 2018Q4 came out better than expected. Despite this, the rand exchange rate was under pressure amid a stronger US dollar and market concerns after President Ramaphosa reiterated in Parliament that the SA read moreLast week, domestic growth and current account data for 2018Q4 came out better than expected. Despite this, the rand exchange rate was under pressure amid a stronger US dollar and market concerns after President Ramaphosa reiterated in Parliament that the SA Reserve Bank (SARB) will be nationalised. The economy expanded by 1.4% q-o-q (seasonally adjusted and annualised, saar) in Q4, bringing full year growth to 0.8% in 2018. The current account deficit narrowed in Q4, but still widened for the full year. In the international section, we unpack the latest trade data from China, a monetary policy announcement from Europe as well as employment figures from the US. BER Weekly, 4 March 2019 Last updated: Mar 4 2019 11:16AM Global stock markets were boosted early last week by the news that US President Trump granted China another reprieve on possible further import tariff hikes. At the start of this week, further optimism on this front continued to boost markets. On the domestic read moreGlobal stock markets were boosted early last week by the news that US President Trump granted China another reprieve on possible further import tariff hikes. At the start of this week, further optimism on this front continued to boost markets. On the domestic data front, after recording a solid surplus in December, SA’s trade balance moved back into deficit territory in January on the back of a decline in exports. However, vehicle export data suggests that the trade balance may improve in February. In international news, 2018Q4 US GDP growth was better than expected, supported by still robust consumer and business spending. In all, 2018 marked the fastest growth since 2015. In contrast, the latest PMI data for China points to a continued slowdown in the world’s second biggest economy. BER Weekly, 25 February 2019 Last updated: Feb 25 2019 11:01AM Domestically, attention was focused on the Budget, in particular the extent to which government would provide financial assistance to Eskom. In the end, the Treasury managed to limit the fiscal slippage of an Eskom cash injection through non-Eskom expenditure read moreDomestically, attention was focused on the Budget, in particular the extent to which government would provide financial assistance to Eskom. In the end, the Treasury managed to limit the fiscal slippage of an Eskom cash injection through non-Eskom expenditure cuts and R15bn worth of tax hikes. In other domestic news, consumer inflation for January surprised on the downside, rising by the slowest pace in almost a year. Internationally, the slowdown in the manufacturing sector continued into February in most major economies. This is according to the latest flash PMI data, and reaffirms the view that global growth is coming under increased strain. BER Weekly, 18 February 2019 Last updated: Feb 18 2019 10:06AM There was a slew of data releases last week, both on the domestic and international front. Domestic releases focused on real economic data for December 2018, all but completing the picture for 2018Q4 GDP. In financial markets, the rand lost further ground read moreThere was a slew of data releases last week, both on the domestic and international front. Domestic releases focused on real economic data for December 2018, all but completing the picture for 2018Q4 GDP. In financial markets, the rand lost further ground last week on the back of a strong US dollar and the return of load shedding. On the international front, we turn to inflation figures from around the globe as well as trade data out of China. BER Weekly, 11 February 2019 Last updated: Feb 11 2019 9:39AM The domestic data calendar was rather light last week with electricity production for December 2018 the only notable release. In the absence of any significant data releases, attention was focused on the State of the Nation Address (SONA) and the read moreThe domestic data calendar was rather light last week with electricity production for December 2018 the only notable release. In the absence of any significant data releases, attention was focused on the State of the Nation Address (SONA) and the announcements made regarding Eskom and the formation of a new investigating directorate. In the international section, we discuss the latest interest rate decisions from both the developed and developing world, as well as trade statistics out of the US. BER Weekly, 4 February 2019 Last updated: Feb 4 2019 10:41AM Last week, financial headlines were dominated by a more dovish-than-expected monetary policy statement of the Federal Reserve (Fed) in the US. The dollar lost some ground against other key currencies, including the rand, after the statement lacked the usual read moreLast week, financial headlines were dominated by a more dovish-than-expected monetary policy statement of the Federal Reserve (Fed) in the US. The dollar lost some ground against other key currencies, including the rand, after the statement lacked the usual prediction of future rate hikes. Domestically, there were a number of data releases. Although the Absa Purchasing Managers’ Index (PMI) was slightly down in January, it was still virtually at the neutral-50 mark and above the average for last year. Besides the PMI, a welcome trade surplus was recorded in December, though it was not on the back of more exports. We also take a brief look at the latest vehicle sales, private credit extension and producer inflation numbers. In terms of the main global data releases, a slowdown in global growth was confirmed by lower GDP growth numbers in the Eurozone and a drop in the Chinese PMI. BER Weekly, 28 January 2019 Last updated: Jan 28 2019 11:36AM Domestically, data released last week revealed that consumer confidence remained in positive territory in the final quarter of last year, though it was down from the Ramaphoria-high during the first half of 2018. The Q4 figure suggests that consumers’ read moreDomestically, data released last week revealed that consumer confidence remained in positive territory in the final quarter of last year, though it was down from the Ramaphoria-high during the first half of 2018. The Q4 figure suggests that consumers’ willingness to spend is still relatively high. Meanwhile, consumer inflation moderated significantly in December 2018 on the back of a huge drop in fuel prices. Internationally, both the European Central Bank (ECB) and the Bank of Japan (BoJ) held their key policy interest rates steady at current levels. Meanwhile, flash Purchasing Managers’ Index (PMI) numbers for January indicated a sustained slowdown in the Eurozone economy, while the US economy retained momentum. In financial markets, the US dollar was somewhat weaker as the trade talks between the US and China made little progress to date BER Weekly, 21 January Last updated: Jan 21 2019 11:01AM Domestically, markets were focused on the latest meeting of the Monetary Policy Committee (MPC) of the SA Reserve Bank (SARB) last week. On the global front, the news flow was dominated by British political chaos associated with the Brexit debacle. Besides a read moreDomestically, markets were focused on the latest meeting of the Monetary Policy Committee (MPC) of the SA Reserve Bank (SARB) last week. On the global front, the news flow was dominated by British political chaos associated with the Brexit debacle. Besides a brief overview of the MPC decision, the domestic section looks at the latest retail sales data, which surprised on the upside. In contrast, mining data disappointed. The international section discusses a slew of data from China, the US and the Eurozone. The section also briefly refers to the outcome of the Brexit vote in the UK parliament. BER Weekly, 14 January Last updated: Jan 14 2019 9:59AM Domestic data released during the first full week of 2019 presented a mixed bag. Manufacturing data, both survey and official statistics, suggest that the factory sector ended 2018 on a positive note. However, new vehicle sales data for December confirmed read moreDomestic data released during the first full week of 2019 presented a mixed bag. Manufacturing data, both survey and official statistics, suggest that the factory sector ended 2018 on a positive note. However, new vehicle sales data for December confirmed that overall sales declined in 2018 compared to 2017. International news headlines were mostly focused on political developments, including the continued government shutdown in the US, trade negotiations between the US and China, as well as Brexit developments (or the lack thereof). On the economic front, there are increasing concerns about the health of the global economy.
BER Weekly (Archive) Short report that reviews important global and domestic financial market and economic data developments of the past week. The BER Weekly is released on Monday mornings. 2019 2018 2017 2016 2015 2014 2013 BER Weekly, 11 November 2019 Last updated: Nov 11 2019 10:45AM Notwithstanding the apparent optimism surrounding President Cyril Ramaphosa’s second Investment Conference last week, economic data released for Q3 disappointed. The consumer turned notably more pessimistic during the quarter, while the latest activity data read moreNotwithstanding the apparent optimism surrounding President Cyril Ramaphosa’s second Investment Conference last week, economic data released for Q3 disappointed. The consumer turned notably more pessimistic during the quarter, while the latest activity data from the country’s secondary sector also paints a dismal picture for GDP. On the global front, the focus was on the latest trade data from the US, China and Germany. The data came against a backdrop of increased optimism about the possibility of a preliminary trade deal being reached between the world’s two largest economies. BER Weekly, 4 November 2019 Last updated: Nov 4 2019 10:51AM The Medium Term Budget Policy Statement (MTBPS) dominated domestic headlines for most of last week. The overall message was that the fiscus (and the economy) is under more pressure than when the budget was tabled in February. In the absence of substantial read moreThe Medium Term Budget Policy Statement (MTBPS) dominated domestic headlines for most of last week. The overall message was that the fiscus (and the economy) is under more pressure than when the budget was tabled in February. In the absence of substantial corrective measures (mainly on government expenditure), key fiscal metrics are projected to worsen notably over the next few years. The weaker fiscal position was an important contributor to Moody’s decision after the close of financial markets on Friday to lower its outlook for SA’s credit rating to negative from stable. BER Weekly, 28 October 2019 Last updated: Oct 28 2019 10:43AM On the domestic front, the only notable data release was consumer inflation for September. While the benign inflation print and weak domestic GDP growth support another interest rate cut, the South African Reserve Bank (SARB) could be hesitant to cut rates – read moreOn the domestic front, the only notable data release was consumer inflation for September. While the benign inflation print and weak domestic GDP growth support another interest rate cut, the South African Reserve Bank (SARB) could be hesitant to cut rates – see the domestic section. In the international section, the interest rate decision by the European Central Bank (ECB) is discussed as well as the latest Purchasing Managers’ Index (PMI) prints from the Eurozone and US. In contrast with last week’s light calendar, this week will be busy on both the domestic and international front. Domestically, the focus will be on the Medium Term Budget Policy Statement (MTBPS) to be presented by Finance Minister Tito Mboweni on Wednesday. Internationally, final PMI figures for September, Q3 GDP estimates from Europe and the US, as well as the policy interest rate decision by the US Federal Reserve will be in focus. BER Weekly, 21 October 2019 Last updated: Oct 21 2019 11:20AM The return of load shedding last week could put a damper on the GDP growth performance in 2019Q4 as it did in 2019Q1. However, the magnitude of the economic impact will depend on the duration and severity of the rolling blackouts. According to Eskom, no load read moreThe return of load shedding last week could put a damper on the GDP growth performance in 2019Q4 as it did in 2019Q1. However, the magnitude of the economic impact will depend on the duration and severity of the rolling blackouts. According to Eskom, no load shedding is planned for this week, but this could change at any moment. Coincidentally, the newest round of load shedding started a few days before the publication of the updated Integrated Resource Plan (IRP), the blueprint for South Africa’s future energy mix. BER Weekly, 14 October 2019 Last updated: Oct 14 2019 10:23AM While incoming data on the global economy remains downbeat, the mood was lifted last week after progress was made on US-China trade talks and Brexit negotiations. On the domestic data front, mining and manufacturing data for August added to growing evidence read moreWhile incoming data on the global economy remains downbeat, the mood was lifted last week after progress was made on US-China trade talks and Brexit negotiations. On the domestic data front, mining and manufacturing data for August added to growing evidence that real GDP growth likely slowed significantly in 2019Q3 after the nice rebound recorded in Q2. In fact, our latest forecast is for GDP growth of only 0.2% q-o-q (annualised), or 0.4% y-o-y in the third quarter, with full-year growth pencilled in at a meagre 0.4%. In international news, ongoing trade tensions continue to disrupt global trade flows and weigh on overall sentiment, with export-oriented economies in particular feeling the strain. To that end, the international section unpacks the latest trade statistics for Germany, the UK and China, while also taking a look at the latest survey data from China and the US. BER Weekly, 7 October 2019 Last updated: Oct 7 2019 10:40AM Heightened concern about global GDP growth after the release of some weak US data fuelled financial market volatility last week. On the domestic front, incoming data prints point to persistent weakness in the domestic economy during 2019Q3. The Absa read moreHeightened concern about global GDP growth after the release of some weak US data fuelled financial market volatility last week. On the domestic front, incoming data prints point to persistent weakness in the domestic economy during 2019Q3. The Absa Purchasing Managers’ Index (PMI) declined for a second consecutive month, falling deep into contractionary territory. Additionally, new vehicle sales remained subdued in September, while credit growth moderated and electricity output suffered a second monthly decline in August. Compounding the domestic frailties is the fact that the global economy is showing even more signs of slowing. Services PMIs followed manufacturing prints lower across most of the developed world in September, while ongoing trade disputes and uncertainty around Brexit continue to weigh on sentiment and activity. BER Weekly, 30 September 2019 Last updated: Sep 30 2019 11:52AM Notwithstanding the release of a fair bit of domestic data last week, domestic financial markets were once again dominated by swings in global risk sentiment. It was an eventful week on the global political front, with a unanimous UK Supreme Court ruling that read moreNotwithstanding the release of a fair bit of domestic data last week, domestic financial markets were once again dominated by swings in global risk sentiment. It was an eventful week on the global political front, with a unanimous UK Supreme Court ruling that Boris Johnson’s suspension of the UK Parliament for five weeks was unlawful. Across the Atlantic, US House Speaker Nancy Pelosi set the ball rolling on an enquiry into whether impeachment charges should be brought against President Donald Trump. The week ended with a further escalation in tensions between the US and China. These events weighed on emerging market assets, including the rand exchange rate. On the domestic data front, price and wage pressures remain subdued, as indicated by the latest producer price index (PPI) and employment statistics. This concurs with weak growth in the formal employment numbers during the second quarter. Internationally, an array of flash Purchasing Managers’ Indices (PMIs) shed the first light on the performance of the real economy during September. Overall, the ongoing slowdown in the Eurozone intensified while the US and China remain on a firmer footing. BER Weekly, 23 September 2019 Last updated: Sep 23 2019 11:23AM Various central banks, including the South African Reserve Bank (SARB), announced their latest interest rate decisions last week. Globally, the most important announcement was from the Federal Reserve (Fed) in the US, which reduced its policy interest rate read moreVarious central banks, including the South African Reserve Bank (SARB), announced their latest interest rate decisions last week. Globally, the most important announcement was from the Federal Reserve (Fed) in the US, which reduced its policy interest rate range by 25 basis points (bps). Some emerging market banks also reduced their key rates, such as Brazil and Indonesia. Financial markets anticipated the Fed’s announcement and the reaction was muted. In contrast to the global easing of rates, the SARB announced no change to the repurchase rate. To us this was somewhat disappointing (although not surprising) given the downward adjustment of the central bank’s growth outlook amid a stable inflation backdrop. Besides the inflation data for August, domestic retail and wholesale trade numbers for July were also released. BER Weekly, 16 September 2019 Last updated: Sep 16 2019 10:42AM Despite weak incoming SA data for 2019Q3, the rand exchange rate and JSE benefitted from a global investor rotation in favour of riskier asset classes (see the markets section) last week. This was aided by the European Central Bank (ECB) announcing a widely read moreDespite weak incoming SA data for 2019Q3, the rand exchange rate and JSE benefitted from a global investor rotation in favour of riskier asset classes (see the markets section) last week. This was aided by the European Central Bank (ECB) announcing a widely expected stimulus package (for more, click here) and the US slightly delaying the imposition of the next round of tariff hikes on Chinese goods. However, an attack on a Saudi oil facility over the weekend saw risk sentiment intensify once more. BER Weekly, 9 September 2019 Last updated: Sep 9 2019 11:58AM Despite a terrible week of unrest in SA, the rand exchange rate and the JSE posted solid gains. Partly, this was in reaction to better-than-expected Q2 GDP data, but also an improvement in global risk sentiment on indications that the US and China will meet read moreDespite a terrible week of unrest in SA, the rand exchange rate and the JSE posted solid gains. Partly, this was in reaction to better-than-expected Q2 GDP data, but also an improvement in global risk sentiment on indications that the US and China will meet in October to try and resolve the trade dispute. On the international front, Chinese trade data underperformed in August, especially exports to the US. BER Weekly, 2 September 2019 Last updated: Sep 2 2019 11:12AM The domestic section unpacks three different data releases covering July, namely trade data, factory-gate inflation, and private section credit extension, as well as the Absa Purchasing Managers’ Index (PMI) for August. The trade account slid back into a read moreThe domestic section unpacks three different data releases covering July, namely trade data, factory-gate inflation, and private section credit extension, as well as the Absa Purchasing Managers’ Index (PMI) for August. The trade account slid back into a deficit after managing to record three consecutive surplus readings, while inflation came in lower than expected. This week, all eyes will be on the Q2 GDP release due tomorrow. BER clients will receive a detailed comment about the GDP print during the day. The international section provides an update on consumer confidence figures from across the globe with the US reading falling sharply in August. The section also looks at this morning’s Chinese PMI data and provides an update on the latest data from Germany. Finally, the markets section unpacks the recent movements of the rand exchange rate, which, pushed by global as well as local factors, traded above R15.40/$ mid-week. BER Weekly, 26 August 2019 Last updated: Aug 26 2019 10:21AM The domestic economic data calendar was light last week, with consumer inflation being the most important release. Inflation came in lower than expected, supporting our (out of consensus) view that the central bank may still have some room to cut the repo read moreThe domestic economic data calendar was light last week, with consumer inflation being the most important release. Inflation came in lower than expected, supporting our (out of consensus) view that the central bank may still have some room to cut the repo rate further at its next meeting in September. On the global growth front, concerns about the outlook for world growth intensified at the end of last week and over the weekend with a further escalation of tit-for-tat tariff hike announcements between the US and China. Regarding international data releases, the focus was on the latest flash Purchasing Managers’ Index (PMI) data from the Eurozone and the US. In both cases, manufacturing indicators are now below the neutral 50-point mark. BER Weekly, 19 August 2019 Last updated: Aug 19 2019 11:17AM We hosted a briefing to clients in Johannesburg with an impressive line-up of speakers attempting to unpack the political and economic environment in SA. The domestic section provides a brief overview of some of the main points of discussion. On the data read moreWe hosted a briefing to clients in Johannesburg with an impressive line-up of speakers attempting to unpack the political and economic environment in SA. The domestic section provides a brief overview of some of the main points of discussion. On the data front, retail sales for June surprised on the upside, providing additional evidence that the SA economy likely returned to growth in 2019Q2. On the international front, we unpack the latest industrial production figures from China and the US. The latest data supports the view that Chinese growth is likely to slow further in 2019H2. BER Weekly, 12 August 2019 Last updated: Aug 12 2019 10:27AM On the domestic front, data on mining and manufacturing output for June was released, completing the picture for 2019Q2. In all, both mining and manufacturing output expanded on a quarterly basis, suggesting that GDP could recover somewhat from the weak read moreOn the domestic front, data on mining and manufacturing output for June was released, completing the picture for 2019Q2. In all, both mining and manufacturing output expanded on a quarterly basis, suggesting that GDP could recover somewhat from the weak figures posted in Q1. In international news, escalating trade tensions between the US and China and persistent uncertainty around Brexit continued to weigh on expectations for global growth. These concerns were reflected in major financial market volatility amid general risk-off sentiment, and continue to support the dovish turn in global central bank policy actions. BER Weekly, 5 August 2019 Last updated: Aug 5 2019 10:21AM Treasury revenue and expenditure data for the first fiscal quarter, released last week, have strengthened the argument that SA’s public finances are in a dire position – at least compared to budget projections in February. This is especially true from the read moreTreasury revenue and expenditure data for the first fiscal quarter, released last week, have strengthened the argument that SA’s public finances are in a dire position – at least compared to budget projections in February. This is especially true from the revenue side. Meanwhile, domestic economic data painted a mixed picture. While the unemployment rate rose to a multi-year high, vehicle exports and the Absa Purchasing Manager’s Index (PMI) for July were noticeably upbeat. BER Weekly, 29 July 2019 Last updated: Jul 29 2019 10:49AM Domestic financial markets were dominated by the reaction of credit rating agencies to Finance Minister Tito Mboweni’s announcement that Eskom will receive an additional R59 billion (bn) bailout. This will be spread over the 2019/20 (R26bn) and 2020/21 read moreDomestic financial markets were dominated by the reaction of credit rating agencies to Finance Minister Tito Mboweni’s announcement that Eskom will receive an additional R59 billion (bn) bailout. This will be spread over the 2019/20 (R26bn) and 2020/21 (R33bn) fiscal years. Combined with the R23bn per annum committed to Eskom in the February budget, the latest bailout means Eskom will receive R105bn in government support through 2020/21. This news overshadowed domestic data releases showing moderate consumer and producer inflation for June. While the additional bailout is positive for Eskom, it places a further drain on the fiscus. Indeed, both Moody’s and Fitch saw the news as negative for SA’s sovereign credit rating outlook. While Moody’s did not pronounce on the actual rating or outlook (see domestic section below), Fitch revised the outlook on its BB+ foreign and local currency rating to negative from stable. This is the first step towards Fitch cutting SA’s rating a further notch into sub-investment territory. Besides the large Eskom bailout, the outlook revision was justified on the grounds of SA’s sustained poor real GDP growth performance and the likely subsequent government revenue underperformance. Fitch also raised concerns about SA’s growth potential, and now expects a consolidated budget deficit of 6.3% of GDP in 2019/20. The impact of the rating agency pronouncements on the rand exchange rate and government bond rates is discussed in the markets section. Internationally, the European Central Bank (ECB) kept monetary policy unchanged last week, but expressed the intention to relax policy going forward. Meanwhile, the manufacturing Purchasing Managers’ Indices (PMIs) in both the Eurozone and the US fell to multi-year lows, continuing the trend in recent months of slowing industrial activity. Key events this week include Eskom’s financial results presentation tomorrow and the US Fed interest rate decision on Wednesday. The Fed is widely expected to cut the policy rate by 25bps. Attention will be focused on the tone of the accompanying statement, especially the extent to which the Fed signals further monetary policy easing down the line. BER Weekly, 22 July 2019 Last updated: Jul 22 2019 9:51AM The big domestic economic news last week was the 25 basis points (bps) cut in the repo rate while the big corporate news of the week was the announcement on Friday that US-based PepsiCo had reached an agreement with SA food company Pioneer Foods to purchase read moreThe big domestic economic news last week was the 25 basis points (bps) cut in the repo rate while the big corporate news of the week was the announcement on Friday that US-based PepsiCo had reached an agreement with SA food company Pioneer Foods to purchase all outstanding shares in the local company in a deal worth about R24.4bn. Internationally, consumer spending in the US and UK remained robust in May while industrial production in the US came under pressure. BER Weekly, 15 July 2019 Last updated: Jul 15 2019 9:52AM Last week was relatively quiet on the domestic data front. Mining and manufacturing output were mixed, but both sectors are set to recover in 2019Q2 after a poor first quarter. This should ensure a much improved GDP print in Q2. Internationally, trade read moreLast week was relatively quiet on the domestic data front. Mining and manufacturing output were mixed, but both sectors are set to recover in 2019Q2 after a poor first quarter. This should ensure a much improved GDP print in Q2. Internationally, trade numbers in China are showing the effects of the trade dispute with the US, while economic growth in China slowed to the slowest rate in at least 27 years. Meanwhile, industrial output in the Eurozone picked up slightly in May, the first improvement in four months. In financial markets, the dollar remained under pressure as a July cut in the US policy interest rate seems ever more likely. This week, the domestic economic calendar is dominated by the SA Reserve Bank’s (SARB) Monetary Policy Committee (MPC) interest rate decision on Thursday. The combination of a further deterioration in the real GDP growth outlook since the previous MPC meeting in May, continued subdued consumer inflation prints and the dovish global monetary policy tilt towards renewed stimulus should result in a 25bps interest rate reduction. This would reduce the repo rate to 6.50% and be the first policy rate drop since March 2018. BER Weekly, 8 July 2019 Last updated: Jul 8 2019 10:20AM During last week, the rand continued to strengthen and even dipped below R14/$ mid-week. However, the tide turned after the release of better-than-expected US nonfarm payrolls figures from the US. The jobs data is discussed in the international section, along read moreDuring last week, the rand continued to strengthen and even dipped below R14/$ mid-week. However, the tide turned after the release of better-than-expected US nonfarm payrolls figures from the US. The jobs data is discussed in the international section, along with manufacturing Purchasing Managers’ Index (PMI) figures from Europe and the US. International PMIs – including the China PMI discussed last week - are broadly trending lower on the back of slowing new orders. This resulted in the global manufacturing PMI slumping to an almost seven-year low in June. The domestic focus is on the latest manufacturing PMI from South Africa, as well as vehicle sales figures in what was otherwise another quiet week on the domestic data front. Both sets of data turned out weak in June. BER Weekly, 1 July 2019 Last updated: Jul 1 2019 10:17AM It was a fairly quiet week on the domestic data front with South African financial markets dominated by the further strengthening of the rand exchange rate. In the domestic section, we unpack the latest producer price trends, labour market developments as read moreIt was a fairly quiet week on the domestic data front with South African financial markets dominated by the further strengthening of the rand exchange rate. In the domestic section, we unpack the latest producer price trends, labour market developments as well as May’s trade balance. Internationally, the focus is on a variety of data releases from Europe, US, China and Japan. Inflation data from the Eurozone and US came in well below their respective central bank’s inflation targets. This supports the recent more dovish stance by both central banks. Indeed, increased bets on pending US rate cuts contributed to a weaker dollar. This provided a welcome boost to the rand. BER Weekly, 24 June 2019 Last updated: Jun 24 2019 12:06PM Emerging market assets, including the rand exchange rate, benefitted handsomely last week from more dovish-than-expected monetary policy outlooks from the US and European central banks. If it was not for some disappointment that President Ramaphosa’s State of read moreEmerging market assets, including the rand exchange rate, benefitted handsomely last week from more dovish-than-expected monetary policy outlooks from the US and European central banks. If it was not for some disappointment that President Ramaphosa’s State of the Nation Address (SONA) lacked concrete details on how Eskom will be brought back to a sustainable financial position, domestic assets may have gained even more. On the domestic data front, the case for an interest rate cut next month was bolstered by the latest consumer inflation print for May which, while somewhat up from April, remained well contained. This, as well as some initial thoughts on the SONA, is discussed in more detail here. As mentioned, internationally the focus was on advanced country monetary policy meetings. The central banks of the US, Japan and the UK all kept their respective policy rates unchanged. However, the sentiment is becoming increasingly dovish and in the case of the US, Japan and Europe, there is a growing likelihood of an interest rate cut before the end of the year. BER Weekly, 14 June 2019 Last updated: Jun 14 2019 11:52AM Domestic economic data for April surprised on the upside this week, quelling fears of a technical recession (two consecutive quarterly contractions in GDP). However, business sentiment data suggests that the recovery may not be sustained throughout 2019Q2. read moreDomestic economic data for April surprised on the upside this week, quelling fears of a technical recession (two consecutive quarterly contractions in GDP). However, business sentiment data suggests that the recovery may not be sustained throughout 2019Q2. Meanwhile, on the international front, consumer inflation data in the US continued to make a case for an interest rate cut later this year, while data from China was mixed. BER Weekly, 10 June 2019 Last updated: Jun 10 2019 9:09AM Domestic financial markets were rattled last week after the release of much weaker-than-expected 2019Q1 GDP figures and mixed messages from the ANC on the mandate of the SA Reserve Bank (SARB). The rand exchange rate weakened significantly through the week. read moreDomestic financial markets were rattled last week after the release of much weaker-than-expected 2019Q1 GDP figures and mixed messages from the ANC on the mandate of the SA Reserve Bank (SARB). The rand exchange rate weakened significantly through the week. Incoming data for the second quarter, including vehicle sales and the Absa Purchasing Managers’ Index (PMI) figures, do not inspire confidence in a strong bounce-back in Q2 GDP. Combined, the weak data necessitated a downward adjustment to our outlook for full-year real GDP growth. On the international front we discuss the dovish turn in international monetary policy, with reference to interest rate decisions from across the globe. BER Weekly, 3 June 2019 Last updated: Jun 3 2019 9:09AM Last week, domestic market focus was on SA political developments as President Cyril Ramaphosa announced his cabinet on Wednesday evening. The cabinet was generally well received, but we remain sceptical as to the willingness and ability of the new cabinet to read moreLast week, domestic market focus was on SA political developments as President Cyril Ramaphosa announced his cabinet on Wednesday evening. The cabinet was generally well received, but we remain sceptical as to the willingness and ability of the new cabinet to deliver pro-growth policy reforms. In other domestic news, we unpack the latest FNB/BER Consumer Confidence Index (CCI), producer price inflation and trade statistics. On the international front, data releases from the US, Europe and China take centre stage. BER Weekly, 27 May 2019 Last updated: May 27 2019 7:49AM The key domestic event last week was the MPC decision on the policy interest rate. As expected, the rate was kept unchanged, but with a more dovish bias. BER Weekly, 20 May 2019 Last updated: May 20 2019 11:37AM Domestic data released last week confirmed that SA GDP most likely contracted in the first quarter, the question is how large the decline will be. The unemployment rate increased in 2019Q1, with notable job losses in the formal sector of the economy, while read moreDomestic data released last week confirmed that SA GDP most likely contracted in the first quarter, the question is how large the decline will be. The unemployment rate increased in 2019Q1, with notable job losses in the formal sector of the economy, while retail, wholesale and motor sales all contracted in the first quarter. Internationally, indications are that economic growth is also slowing down in China, while Germany experienced a slight rebound. The trade dispute between the US and China is partly to blame for China’s woes and given the current tension, could escalate and have more dire consequences. On the political front, populist parties are expected to gain more seats in the EU parliamentary elections this week. Meanwhile, in financial markets, currencies and share prices were also affected by the US-China trade tensions. BER Weekly, 13 May 2019 Last updated: May 13 2019 11:40AM The key event over the past week was the national and provincial election on 8 May. The results point to relative stability and are unpacked in the current affairs section below. Generally, the election outcome was welcomed by the markets. However, this more read moreThe key event over the past week was the national and provincial election on 8 May. The results point to relative stability and are unpacked in the current affairs section below. Generally, the election outcome was welcomed by the markets. However, this more positive sentiment was to some extent overshadowed by a further escalation of the trade tension between the US and China. As such, in the international section, the focus is on recent trade data from China and the US. The data is against the backdrop of scheduled trade negotiations between the two countries that took place last week. Talks continued despite the US imposing even higher tariffs on Chinese goods from Friday and China stating it would implement the “necessary countermeasures” in return. Finally, domestic activity data for March surprised on the upside, but still suggests that the economy is likely to contract sharply in 2019Q1. BER Weekly, 6 May 2019 Last updated: May 6 2019 11:33AM Awaiting Wednesday’s election with bated breath, we briefly unpack the latest poll results and possible implications of the vote outcome in the current affairs section below. On the data front, local vehicle sales and factory activity data showed an read moreAwaiting Wednesday’s election with bated breath, we briefly unpack the latest poll results and possible implications of the vote outcome in the current affairs section below. On the data front, local vehicle sales and factory activity data showed an improvement in April. This is a welcome development as all signs are that the economy will contract quite steeply in the first quarter of 2019. The international section looks at the US nonfarm payroll data, Eurozone growth figures as well as monetary policy decisions in the US and UK. BER Weekly, 29 April 2019 Last updated: Apr 29 2019 11:08AM It was a quiet week on the domestic data front with the main release being the 2019Q1 FNB/BER Consumer Confidence Index. After remaining elevated for most of last year, consumer confidence fell back to its long-term average in 2019Q1. This was underpinned by read moreIt was a quiet week on the domestic data front with the main release being the 2019Q1 FNB/BER Consumer Confidence Index. After remaining elevated for most of last year, consumer confidence fell back to its long-term average in 2019Q1. This was underpinned by a change in consumers’ take on the prospects for the South African economy over the next year. Internationally, while US GDP growth for the first quarter of 2019 beat expectations, the German economy continues to cool. BER Weekly, 18 April 2019 Last updated: Apr 18 2019 2:26PM Despite the shorter week, there was still some domestic data to digest, namely consumer inflation and retail sales. While inflation moved in line with the consensus predictions (albeit lower than our expectation), the outcome for retail sales beat read moreDespite the shorter week, there was still some domestic data to digest, namely consumer inflation and retail sales. While inflation moved in line with the consensus predictions (albeit lower than our expectation), the outcome for retail sales beat expectations. Nonetheless, growth in retail sales remains weak and although the March data is still outstanding, the broader internal trade category will likely be a drag on 2019Q1 GDP. On the international front, the latest US trade performance and Chinese data (including 2019Q1 GDP growth) largely fared better than expected. BER Weekly, 15 April 2019 Last updated: Apr 15 2019 11:33AM On the domestic front, incoming data for 2019Q1 continues to disappoint. The latest mining and manufacturing output data suggest that GDP growth could slow notably in Q1, with a contraction looking increasingly likely. The rand ignored the raft of read moreOn the domestic front, incoming data for 2019Q1 continues to disappoint. The latest mining and manufacturing output data suggest that GDP growth could slow notably in Q1, with a contraction looking increasingly likely. The rand ignored the raft of disappointing domestic data, strengthening to below R14/$ - more on this in the Markets section. In international news, the European Central Bank (ECB) stuck with its current accommodative monetary policy stance, suggesting that further stimulus might be on the cards should growth remain subdued. We also unpack inflation data from the US and China, as well as the latest Chinese trade statistics. BER Weekly, 8 April 2019 Last updated: Apr 8 2019 12:15PM Last week, financial markets continued to digest the ratings reprieve offered by Moody’s, with the rand ending up a clear winner – the domestic unit strengthened by almost 3% against most major currencies. Domestic data releases, however, suggest that real read moreLast week, financial markets continued to digest the ratings reprieve offered by Moody’s, with the rand ending up a clear winner – the domestic unit strengthened by almost 3% against most major currencies. Domestic data releases, however, suggest that real economic activity remains in the doldrums, with new passenger car sales and the Absa Purchasing Managers’ Index (PMI) painting a gloomy picture. On the international front, the latest data shows that the US economy continues to chug along at a healthy pace. In contrast, growth appears to be slowing in the UK and the Eurozone (EZ). This week, all eyes will once again be on the ongoing Brexit negotiations. It remains to be seen whether UK lawmakers can agree on a Brexit deal before the current departure date, set for 12 April. BER Weekly, 1 April 2019 Last updated: Apr 1 2019 11:34AM Against the general expectation, but as was the case in late 2018, Moody’s credit agency again decided to skip (as they are entitled to do) a scheduled pronouncement on SA’s sovereign credit rating on Friday. This implies that the rating remains at one notch read moreAgainst the general expectation, but as was the case in late 2018, Moody’s credit agency again decided to skip (as they are entitled to do) a scheduled pronouncement on SA’s sovereign credit rating on Friday. This implies that the rating remains at one notch above sub-investment grade, with a stable outlook. Domestic financial markets responded positively to the news this morning (see markets section). Although Moody’s reprieve is cause for relief, the current environment of weak SA real GDP growth and numerous fiscal risks (illustrated again last week by Sanral’s decision to ‘temporary’ suspend e-toll summonses) suggest that the risk of a rating outlook change and ultimately a credit downgrade will remain in the foreseeable future. Before the Moody’s decision, the Monetary Policy Committee (MPC) decided to keep the repo rate unchanged. Other domestic news included an acceleration in producer inflation, an improvement in employment numbers and a modest trade surplus in February. Internationally, the US reported a smaller trade deficit in January, while trade negotiations with China resumed last Thursday. In China, purchasing managers’ indices (PMIs) ticked up above the neutral-50 mark, while in Britain no progress has been made on the way forward regarding Brexit. BER Weekly, 25 March 2019 Last updated: Mar 25 2019 10:22AM Last week, financial markets were surprised by a more dovish-than-expected monetary policy statement from the Federal Reserve (Fed) in the US. In response, a section of the US yield curve inverted. As expected, the Bank of England (BoE) also held its policy read moreLast week, financial markets were surprised by a more dovish-than-expected monetary policy statement from the Federal Reserve (Fed) in the US. In response, a section of the US yield curve inverted. As expected, the Bank of England (BoE) also held its policy rate unchanged. Besides monetary policy, flash PMI data from key economies continue to point towards a slowdown in global growth. Domestically, the consumer and trade sector came into focus. In February, headline consumer inflation remained safely below the 4.5% midpoint of the target range. In the trade sector, real retail and wholesale sales improved marginally in January. However, nominal sales were not much higher, an indication that trade inflation was running below headline consumer inflation at the start of this year. In the week ahead, news will be dominated by Moody’s judgement of the SA economy on Friday. Read more in the current affairs section. BER Weekly, 18 March 2019 Last updated: Mar 18 2019 11:21AM Domestic economic data released last week indicates that growth momentum remained poor at the start of the year. In the domestic section, we discuss the latest reading for the RMB/BER Business Confidence Index (BCI), along with mining and manufacturing output read moreDomestic economic data released last week indicates that growth momentum remained poor at the start of the year. In the domestic section, we discuss the latest reading for the RMB/BER Business Confidence Index (BCI), along with mining and manufacturing output for January. On the international front, we briefly discuss the latest Brexit developments, as well as activity data out of China and inflation figures from the US. BER Weekly, 11 March 2019 Last updated: Mar 11 2019 10:17AM Last week, domestic growth and current account data for 2018Q4 came out better than expected. Despite this, the rand exchange rate was under pressure amid a stronger US dollar and market concerns after President Ramaphosa reiterated in Parliament that the SA read moreLast week, domestic growth and current account data for 2018Q4 came out better than expected. Despite this, the rand exchange rate was under pressure amid a stronger US dollar and market concerns after President Ramaphosa reiterated in Parliament that the SA Reserve Bank (SARB) will be nationalised. The economy expanded by 1.4% q-o-q (seasonally adjusted and annualised, saar) in Q4, bringing full year growth to 0.8% in 2018. The current account deficit narrowed in Q4, but still widened for the full year. In the international section, we unpack the latest trade data from China, a monetary policy announcement from Europe as well as employment figures from the US. BER Weekly, 4 March 2019 Last updated: Mar 4 2019 11:16AM Global stock markets were boosted early last week by the news that US President Trump granted China another reprieve on possible further import tariff hikes. At the start of this week, further optimism on this front continued to boost markets. On the domestic read moreGlobal stock markets were boosted early last week by the news that US President Trump granted China another reprieve on possible further import tariff hikes. At the start of this week, further optimism on this front continued to boost markets. On the domestic data front, after recording a solid surplus in December, SA’s trade balance moved back into deficit territory in January on the back of a decline in exports. However, vehicle export data suggests that the trade balance may improve in February. In international news, 2018Q4 US GDP growth was better than expected, supported by still robust consumer and business spending. In all, 2018 marked the fastest growth since 2015. In contrast, the latest PMI data for China points to a continued slowdown in the world’s second biggest economy. BER Weekly, 25 February 2019 Last updated: Feb 25 2019 11:01AM Domestically, attention was focused on the Budget, in particular the extent to which government would provide financial assistance to Eskom. In the end, the Treasury managed to limit the fiscal slippage of an Eskom cash injection through non-Eskom expenditure read moreDomestically, attention was focused on the Budget, in particular the extent to which government would provide financial assistance to Eskom. In the end, the Treasury managed to limit the fiscal slippage of an Eskom cash injection through non-Eskom expenditure cuts and R15bn worth of tax hikes. In other domestic news, consumer inflation for January surprised on the downside, rising by the slowest pace in almost a year. Internationally, the slowdown in the manufacturing sector continued into February in most major economies. This is according to the latest flash PMI data, and reaffirms the view that global growth is coming under increased strain. BER Weekly, 18 February 2019 Last updated: Feb 18 2019 10:06AM There was a slew of data releases last week, both on the domestic and international front. Domestic releases focused on real economic data for December 2018, all but completing the picture for 2018Q4 GDP. In financial markets, the rand lost further ground read moreThere was a slew of data releases last week, both on the domestic and international front. Domestic releases focused on real economic data for December 2018, all but completing the picture for 2018Q4 GDP. In financial markets, the rand lost further ground last week on the back of a strong US dollar and the return of load shedding. On the international front, we turn to inflation figures from around the globe as well as trade data out of China. BER Weekly, 11 February 2019 Last updated: Feb 11 2019 9:39AM The domestic data calendar was rather light last week with electricity production for December 2018 the only notable release. In the absence of any significant data releases, attention was focused on the State of the Nation Address (SONA) and the read moreThe domestic data calendar was rather light last week with electricity production for December 2018 the only notable release. In the absence of any significant data releases, attention was focused on the State of the Nation Address (SONA) and the announcements made regarding Eskom and the formation of a new investigating directorate. In the international section, we discuss the latest interest rate decisions from both the developed and developing world, as well as trade statistics out of the US. BER Weekly, 4 February 2019 Last updated: Feb 4 2019 10:41AM Last week, financial headlines were dominated by a more dovish-than-expected monetary policy statement of the Federal Reserve (Fed) in the US. The dollar lost some ground against other key currencies, including the rand, after the statement lacked the usual read moreLast week, financial headlines were dominated by a more dovish-than-expected monetary policy statement of the Federal Reserve (Fed) in the US. The dollar lost some ground against other key currencies, including the rand, after the statement lacked the usual prediction of future rate hikes. Domestically, there were a number of data releases. Although the Absa Purchasing Managers’ Index (PMI) was slightly down in January, it was still virtually at the neutral-50 mark and above the average for last year. Besides the PMI, a welcome trade surplus was recorded in December, though it was not on the back of more exports. We also take a brief look at the latest vehicle sales, private credit extension and producer inflation numbers. In terms of the main global data releases, a slowdown in global growth was confirmed by lower GDP growth numbers in the Eurozone and a drop in the Chinese PMI. BER Weekly, 28 January 2019 Last updated: Jan 28 2019 11:36AM Domestically, data released last week revealed that consumer confidence remained in positive territory in the final quarter of last year, though it was down from the Ramaphoria-high during the first half of 2018. The Q4 figure suggests that consumers’ read moreDomestically, data released last week revealed that consumer confidence remained in positive territory in the final quarter of last year, though it was down from the Ramaphoria-high during the first half of 2018. The Q4 figure suggests that consumers’ willingness to spend is still relatively high. Meanwhile, consumer inflation moderated significantly in December 2018 on the back of a huge drop in fuel prices. Internationally, both the European Central Bank (ECB) and the Bank of Japan (BoJ) held their key policy interest rates steady at current levels. Meanwhile, flash Purchasing Managers’ Index (PMI) numbers for January indicated a sustained slowdown in the Eurozone economy, while the US economy retained momentum. In financial markets, the US dollar was somewhat weaker as the trade talks between the US and China made little progress to date BER Weekly, 21 January Last updated: Jan 21 2019 11:01AM Domestically, markets were focused on the latest meeting of the Monetary Policy Committee (MPC) of the SA Reserve Bank (SARB) last week. On the global front, the news flow was dominated by British political chaos associated with the Brexit debacle. Besides a read moreDomestically, markets were focused on the latest meeting of the Monetary Policy Committee (MPC) of the SA Reserve Bank (SARB) last week. On the global front, the news flow was dominated by British political chaos associated with the Brexit debacle. Besides a brief overview of the MPC decision, the domestic section looks at the latest retail sales data, which surprised on the upside. In contrast, mining data disappointed. The international section discusses a slew of data from China, the US and the Eurozone. The section also briefly refers to the outcome of the Brexit vote in the UK parliament. BER Weekly, 14 January Last updated: Jan 14 2019 9:59AM Domestic data released during the first full week of 2019 presented a mixed bag. Manufacturing data, both survey and official statistics, suggest that the factory sector ended 2018 on a positive note. However, new vehicle sales data for December confirmed read moreDomestic data released during the first full week of 2019 presented a mixed bag. Manufacturing data, both survey and official statistics, suggest that the factory sector ended 2018 on a positive note. However, new vehicle sales data for December confirmed that overall sales declined in 2018 compared to 2017. International news headlines were mostly focused on political developments, including the continued government shutdown in the US, trade negotiations between the US and China, as well as Brexit developments (or the lack thereof). On the economic front, there are increasing concerns about the health of the global economy.