Economic information that works for you ResearchWeeklyCommentsResearch NotesAd-Hoc researchS.E.EUniversity working papers 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. 2018 2017 2016 2015 2014 2013 BER Weekly, 10 December Last updated: Dec 10 2018 10:56AM Dominating the domestic headlines last week was the news that South Africa exited a technical recession in 2018Q3. While this was widely expected, the pace of GDP growth surprised on the upside. More on this in the domestic section. After the release of some read moreDominating the domestic headlines last week was the news that South Africa exited a technical recession in 2018Q3. While this was widely expected, the pace of GDP growth surprised on the upside. More on this in the domestic section. After the release of some survey data for the fourth quarter (see domestic section for details), a spate of actual activity data releases this week will provide further guidance on how GDP growth performed in 2018Q4. On the international front, US employment data rose by less than expected in November while the international trade balance data for October recorded the biggest deficit in ten years. This, as well as PMI data from China, is discussed here. BER Weekly, 3 December Last updated: Dec 3 2018 11:28AM In the domestic section we unpack the latest BER consumer and business confidence numbers. The latest reading for the Absa Purchasing Managers’ Index (PMI) and producer price inflation figures for October are also discussed. On the international front, PMI read moreIn the domestic section we unpack the latest BER consumer and business confidence numbers. The latest reading for the Absa Purchasing Managers’ Index (PMI) and producer price inflation figures for October are also discussed. On the international front, PMI data confirms that Chinese growth continues to slow, while comments by US Federal Reserve officials point toward a possibly more dovish interest rate stance for the US central bank. BER Weekly, 26 November Last updated: Nov 26 2018 10:04AM On the domestic front, the main focus was on the South African Reserve Bank’s (SARB) monetary policy decision last week. The SARB decided to hike the interest rate by 25 basis points (bps) after a rigorous debate. The decision mainly hinged on sustained read moreOn the domestic front, the main focus was on the South African Reserve Bank’s (SARB) monetary policy decision last week. The SARB decided to hike the interest rate by 25 basis points (bps) after a rigorous debate. The decision mainly hinged on sustained higher inflation going forward (with further upside risks) and the bank hoping to prevent more aggressive rate hikes in the future by acting now. On a positive note, the Brent crude oil price continued its steady decline last week, which means local consumers may see some relief on the petrol price front next month – see the markets section. In the international section, we unpack the latest flash Purchasing Managers’ Index (PMI) figures from the Eurozone and the US. The PMI suggests that growth is continuing to trend lower in the Eurozone, but remains solid in the US. The section also briefly refers to the Brexit deal endorsed by the European Union (EU) over the weekend. BER Weekly, 19 November Last updated: Nov 19 2018 11:21AM In market news, the rand exchange rate took the Constitutional Review Committee’s decision to propose an amendment to Section 25 of the Constitution to allow expropriation without compensation (EWC) in its stride. Globally, the focus was on the chaotic Brexit read moreIn market news, the rand exchange rate took the Constitutional Review Committee’s decision to propose an amendment to Section 25 of the Constitution to allow expropriation without compensation (EWC) in its stride. Globally, the focus was on the chaotic Brexit negotiations. On the data front, we unpack the latest retail, wholesale and motor trade data in the domestic section. Sales came in stronger than expected across most categories. Combined with an expected improvement in agricultural output and the rebound in manufacturing output, this should help lift the economy out of recession in Q3. In the international section we discuss the latest GDP data out of Germany and Japan, along with inflation data from the US and the UK. BER Weekly, 12 November Last updated: Nov 12 2018 9:39AM In the absence of major market-moving local data releases last week, South African financial market moves were dominated by gyrations on global markets. In the domestic section, we unpack the latest mining and manufacturing output data from Statistics South read moreIn the absence of major market-moving local data releases last week, South African financial market moves were dominated by gyrations on global markets. In the domestic section, we unpack the latest mining and manufacturing output data from Statistics South Africa (Stats SA). The September prints confirm our view that the economy likely exited the technical recession in Q3, but growth is expected to have remained weak. On the international front, the focus is on the latest monetary policy decision by the US Federal Reserve (Fed), UK GDP figures as well as the latest international trade data from China. The Chinese trade data reflected strong growth in exports, which is set to slow when additional US trade tariffs likely kick in early next year. The markets section explains the drivers of the see-sawing rand exchange rate, which managed to dip below R14/$ mid-week, but weakened again at the end of the week. BER Weekly, 5 November Last updated: Nov 5 2018 10:33AM Various domestic economic indicators were published last week - mostly reflecting tough conditions. On the negative side, the unemployment rate increased, the trade balance swung into a deficit and the Absa PMI declined. An increase in the sale of commercial read moreVarious domestic economic indicators were published last week - mostly reflecting tough conditions. On the negative side, the unemployment rate increased, the trade balance swung into a deficit and the Absa PMI declined. An increase in the sale of commercial vehicles was the exception on the positive side. Internationally, preliminary indications are that the Eurozone economy continued to lose momentum in the third quarter. Meanwhile, policy makers at the central banks of Japan and the UK made no changes to their key interest rates. Lastly, in the US, nonfarm payroll data signalled a healthy labour market with rising wages, enforcing expectations for another Federal Reserve Bank (Fed) policy rate hike in December. In financial markets, the domestic equity market tracked global bourses higher to recover strongly from recent losses. BER Weekly, 29 October Last updated: Oct 29 2018 12:11PM As cautioned in the previous edition of the Weekly, the rand exchange rate and government bond yields were under pressure towards the end of last week (see markets section). This was after Finance Minister Tito Mboweni tabled his maiden Medium Term Budget read moreAs cautioned in the previous edition of the Weekly, the rand exchange rate and government bond yields were under pressure towards the end of last week (see markets section). This was after Finance Minister Tito Mboweni tabled his maiden Medium Term Budget Policy Statement (MTBPS) in parliament. The headline fiscal ratios showed a notable deterioration compared to the February Budget, which was negative for domestic financial markets. On a positive note, the minister’s speech candidly stipulated the steps SA needs to take in order to overcome some significant challenges. Clients can read more in our comment. Besides the MTBPS, Stats SA released the consumer and producer inflation numbers for September; read more below. Internationally, flash Purchasing Managers’ Indices (PMI) from the US and the Eurozone were published for October by Markit. These indicate that growth in the US economy is still vibrant, while the Eurozone continues to lose momentum. However, the European Central Bank (ECB) remains optimistic about the region and expects to start tightening monetary policy next year. BER Weekly, 22 October 2018 Last updated: Oct 22 2018 11:02AM Domestic data last week was a mixed bag. While retail and wholesale trade data for August was reasonably upbeat, mining production continued to underwhelm. On the international front, the minutes of the September Federal Open Market Committee (FOMC) revealed read moreDomestic data last week was a mixed bag. While retail and wholesale trade data for August was reasonably upbeat, mining production continued to underwhelm. On the international front, the minutes of the September Federal Open Market Committee (FOMC) revealed a somewhat more hawkish view on the future path of the policy interest rate while at the same time highlighting downside risks to growth. This week, the domestic focus will be squarely on the Medium Term Budget Policy Statement (MTBPS). Clients can expect a comprehensive overview after the event. BER Weekly, 15 October Last updated: Oct 15 2018 11:47AM Domestic headlines last week were focused on the resignation of Nhlanhla Nene as finance minister and the appointment of former Reserve Bank governor Tito Mboweni as his replacement. Along with the gyrations of the US dollar, much of the local currency’s read moreDomestic headlines last week were focused on the resignation of Nhlanhla Nene as finance minister and the appointment of former Reserve Bank governor Tito Mboweni as his replacement. Along with the gyrations of the US dollar, much of the local currency’s fluctuations were tied to these developments, especially with the Medium Term Budget Policy Statement (MTBPS) looming . Meanwhile, on the global data front, inflation pressure eased in the US in September. Both producer and consumer inflation recorded slower growth on an annual basis. BER Weekly, 8 October Last updated: Oct 8 2018 11:16AM In a quiet week on the domestic data front, local financial markets took direction from US dollar strength and higher US bond yields. In the domestic section, we unpack the latest vehicle sales data. We also discuss the BER’s revised forecast for real GDP read moreIn a quiet week on the domestic data front, local financial markets took direction from US dollar strength and higher US bond yields. In the domestic section, we unpack the latest vehicle sales data. We also discuss the BER’s revised forecast for real GDP growth for the period 2018 to 2020. The combination of weak GDP prints in 2018H1 and several other adverse developments have necessitated a significant downward revision to our outlook for 2018/19. In the international section we discuss the latest non-farm payroll report out of the US, which points to continued improvements in the labour market. We also look at the latest reading for the JP Morgan Global Manufacturing Purchasing Managers’ Index (PMI) for a clue regarding the stance of the global economy. BER Weekly, 1 October Last updated: Oct 1 2018 11:35AM There was a raft of domestic data releases last week, including the Absa Purchasing Managers’ Index (PMI), and Producer Price Index (PPI) and employment data from Statistics South Africa (Stats SA). These data releases, among others, are unpacked in the read moreThere was a raft of domestic data releases last week, including the Absa Purchasing Managers’ Index (PMI), and Producer Price Index (PPI) and employment data from Statistics South Africa (Stats SA). These data releases, among others, are unpacked in the domestic section. On the international front, we discuss the latest interest rate decision by the US Federal Reserve (Fed). The Fed hiked its main policy interest rate and the accompanying statement suggest that further gradual increases are likely. BER Weekly, 21 September Last updated: Sep 21 2018 1:20PM Domestically, the focus was on the interest rate decision by the Monetary Policy Committee (MPC) of the SA Reserve Bank (SARB) yesterday. Concerns about the weak state of the real economy and (more importantly) the lack of demand-side pressure on inflation read moreDomestically, the focus was on the interest rate decision by the Monetary Policy Committee (MPC) of the SA Reserve Bank (SARB) yesterday. Concerns about the weak state of the real economy and (more importantly) the lack of demand-side pressure on inflation drove the MPC to keep rates unchanged. Furthermore, inflation and inflation expectations remain relatively contained. We also discuss the stimulus plan announced by President Cyril Ramaphosa on Friday morning. The international section looks at the latest consumer inflation prints in the Eurozone (EZ) and the United Kingdom (UK). The markets section unpacks reasons why the rand strengthened over the last week. BER Weekly, 17 September Last updated: Sep 17 2018 10:56AM Last week, Statistics South Africa (Stats SA) released key data on the health of the SA economy at the start of Q3. The data proved to be a mixed bag, with mining output disappointing while manufacturing performed much better than expected. The international read moreLast week, Statistics South Africa (Stats SA) released key data on the health of the SA economy at the start of Q3. The data proved to be a mixed bag, with mining output disappointing while manufacturing performed much better than expected. The international section looks at industrial production figures from the US, Eurozone and UK. Furthermore, we unpack the interest rate decisions of several central banks. The most remarkable decision was Turkey’s central bank call to hike its interest rate by 625 basis points. This move was welcomed by markets and also lifted spirits towards the rand – more on this in the markets section. BER Weekly, 10 September Last updated: Sep 10 2018 11:22AM Last week saw domestic financial markets remain under pressure. The rand exchange rate weakened further as Stats SA reported that the domestic economy entered a technical recession in the second quarter of 2018. Among the economic subsectors, the contraction read moreLast week saw domestic financial markets remain under pressure. The rand exchange rate weakened further as Stats SA reported that the domestic economy entered a technical recession in the second quarter of 2018. Among the economic subsectors, the contraction was most severe in the agriculture, trade and transport sectors. Only the mining and finance sectors were able to register significant positive growth. The improvement in mining came on the back of a surge in mineral exports, contributing to a trade surplus during the second quarter, which in turn led to an improvement in the current account deficit. Internationally, the latest trade data from China and the US points toward no relief of the ongoing ‘trade war’ between the two super powers. China’s trade surplus with the US reached an all-time high in August. Meanwhile, nonfarm payroll data released on Friday indicates a healthy US labour market, with accelerating wage increases BER Weekly, 3 September Last updated: Sep 3 2018 11:11AM Economic data released last week and this morning reflects a domestic economy that is currently in a weakened state. In August, the manufacturing sector suffered a sharp decline in new sales orders, coupled with a drop in business activity, as indicated by read moreEconomic data released last week and this morning reflects a domestic economy that is currently in a weakened state. In August, the manufacturing sector suffered a sharp decline in new sales orders, coupled with a drop in business activity, as indicated by the Absa Purchasing Managers’ Index (PMI). Added to this, credit extension slowed down to levels on par with consumer inflation, implying no growth in real terms. Internationally, we briefly discuss the financial crises unfolding in Argentina and Turkey. The section also unpacks data releases from the US, Eurozone and China. The markets section extends the focus to the financial implications of the troubles in Argentina and Turkey, which also impacted the currencies of South Africa (SA) and India. Besides these, local share prices were affected by a regulatory dispute with Nigeria, slashing the price of MTN BER Weekly, 27 August 2018 Last updated: Aug 27 2018 11:01AM A spate of flash PMI data for August was released last week which confirmed that growth in developed economies remains well supported. The focus on the domestic side was on the July consumer inflation numbers. An acceleration to 5.1% y-o-y was recorded, in read moreA spate of flash PMI data for August was released last week which confirmed that growth in developed economies remains well supported. The focus on the domestic side was on the July consumer inflation numbers. An acceleration to 5.1% y-o-y was recorded, in part as a result of the rising price of petrol. BER Weekly_20 August 2018 Last updated: Aug 20 2018 12:08PM Global and domestic financial markets saw wild swings last week as the deteriorating situation in Turkey spilled over to other emerging market currencies, most notably the rand exchange rate. BER Weekly, 13 August 2018 Last updated: Aug 13 2018 10:36AM It was a quiet week on the domestic data front, with only manufacturing production for June released. However, there were significant moves on domestic financial markets in the holiday-shortened week, with the rand exchange rate under significant pressure. read moreIt was a quiet week on the domestic data front, with only manufacturing production for June released. However, there were significant moves on domestic financial markets in the holiday-shortened week, with the rand exchange rate under significant pressure. Increased geopolitical tension and a general risk-off trading environment weighed on emerging market assets, including the rand and Turkish lira, over the week. More on this in the markets section. In other news, on Friday National Treasury released the report of the committee tasked to review the basket of goods excluded from Value Added Tax (VAT). The main recommendations are outlined in the current affairs section. On the international front, overall economic activity picked up in Japan and the UK in 2018Q2 as reflected in the latest GDP prints. China’s trade surplus with the US shrank marginally in July but will likely not be enough to alleviate US-China tensions. In fact, President Donald Trump announced new tariffs to be implemented later in August with his Chinese counterpart vowing to follow suit. Finally, US core inflation accelerated, fuelling expectations for a rate hike in September. BER Weekly, 6 August 2018 Last updated: Aug 6 2018 11:05AM A mixed bag of data releases on the domestic front last week indicate that domestic economic activity remains under pressure. On the positive side, the Absa Purchasing Managers’ Index (PMI) ticked up to above the neutral 50-point mark in July, while strong read moreA mixed bag of data releases on the domestic front last week indicate that domestic economic activity remains under pressure. On the positive side, the Absa Purchasing Managers’ Index (PMI) ticked up to above the neutral 50-point mark in July, while strong export growth in June led to an improvement in the overall external trade balance. On the other hand, vehicle exports struggled in July, while the unemployment rate increased in 2018Q2 on the back of lacklustre employment growth. In international news, we focus on the latest round of monetary policy decisions from the developed world, activity indicators from China and the Eurozone, as well labour market data out of the US. BER Weekly, 30 July 2018 Last updated: Jul 30 2018 10:42AM The domestic economic data calendar was very light last week, with the only notable release being producer inflation for June. This morning, we saw the release of credit growth statistics for June. On domestic financial markets, the rand exchange rate was read moreThe domestic economic data calendar was very light last week, with the only notable release being producer inflation for June. This morning, we saw the release of credit growth statistics for June. On domestic financial markets, the rand exchange rate was supported by the announcement that China plans to invest almost $15bn in the SA economy, while Eskom secured a R33bn loan from China’s Development Bank. In the international section, we have a look at the US GDP figure for Q2. As expected, growth accelerated notably from Q1. The section further unpacks the latest flash Purchasing Managers’ Index (PMI) releases for the US and the Eurozone. BER Weekly, 23 July 2018 Last updated: Jul 23 2018 10:45AM Locally, the focus was on the South African Reserve Bank’s (SARB) policy interest rate decision. As expected, the SARB kept the rate unchanged, but the overall tone of the statement was fairly hawkish. In addition, we unpack the latest retail and wholesale read moreLocally, the focus was on the South African Reserve Bank’s (SARB) policy interest rate decision. As expected, the SARB kept the rate unchanged, but the overall tone of the statement was fairly hawkish. In addition, we unpack the latest retail and wholesale trade data as well as the June inflation print. On the international front, the focus is also on inflation figures from the Eurozone and the United Kingdom. The section further summarises the latest industrial production and retail sales data from the US, which both point to a strong Q2 GDP print. BER Weekly, 16 July 2016 Last updated: Jul 16 2018 11:09AM In domestic news, both mining and manufacturing output rebounded in May after posting weak growth in April. However, mining output is still set to contract in 2018Q2, while only a slight rebound is on the cards for manufacturing production as output growth read moreIn domestic news, both mining and manufacturing output rebounded in May after posting weak growth in April. However, mining output is still set to contract in 2018Q2, while only a slight rebound is on the cards for manufacturing production as output growth remains lacklustre. Furthermore, the near-term outlook for the mining sector is clouded by the possibility of labour unrest following the commencement of wage negotiations in the gold sector. On the international front, US consumer price inflation rose to a six-year high in June, suggesting further interest rates hikes remain firmly on the cards. Across the pacific, China’s trade surplus with the US rose to a record-high in June which could provide further ammunition for President Trump in the ongoing trade dispute. BER Weekly, 9 July 2018 Last updated: Jul 9 2018 12:36PM On the domestic front, economic news was a mixed bag last week. On the upside, domestic vehicle sales continued to grow, especially in the case of heavy vehicles such as trucks and buses. On the downside, electricity output remained under pressure. On the read moreOn the domestic front, economic news was a mixed bag last week. On the upside, domestic vehicle sales continued to grow, especially in the case of heavy vehicles such as trucks and buses. On the downside, electricity output remained under pressure. On the international scene, nonfarm payroll data indicates that the US economy is still creating new jobs at a steady rate. Meanwhile, June Purchasing Managers’ Indices (PMIs) for the US and China reflect a vibrant economy in the US during the second quarter, and ‘business as usual’ in China. Furthermore, the IMF scaled down its outlook for the German economy. On financial markets the US dollar lost some ground after Chinese officials said they will not use the yuan as a trade-policy weapon, benefiting emerging market (EM) currencies to some extent. BER Weekly_2 July Last updated: Jul 3 2018 10:15AM No description available BER Weekly_25 June 2018 Last updated: Jun 25 2018 11:01AM The rand hit a 7-month low against the US dollar last week as emerging market assets continued to suffer. BER Weekly_18 June 2018 Last updated: Jun 18 2018 12:00PM A raft of domestic data released last week suggested that, after a poor first quarter, the SA economy remained under pressure at the start of 2018Q2. BER Weekly, 11 June 2018 Last updated: Jun 11 2018 10:39AM Over the weekend, welcome news broke that the majority of public sector trade unions had signed a multi-year wage deal with the government. Unfortunately, the costs are significantly more than budgeted for by National Treasury in the February Budget. This read moreOver the weekend, welcome news broke that the majority of public sector trade unions had signed a multi-year wage deal with the government. Unfortunately, the costs are significantly more than budgeted for by National Treasury in the February Budget. This means that the government is faced with some tough choices. The fact that GDP growth disappointed in Q1 and suggests that full-year growth could be lower than forecast by Treasury further complicates matters. This, as well as the latest manufacturing output data, is unpacked in the domestic section. On the international data front, the major releases focussed on trade and the outcomes were essentially fuel on the fire of the trade-war rhetoric coming from the US. The big US trade deficit remains one of US President Donald Trump’s pet peeves. Trump made this clear again on a Twitter rant in the wake of the weekend’s G7 meeting in Canada. BER Weekly, 4 June 2018 Last updated: Jun 4 2018 11:01AM It was a busy week on the domestic data front. The manufacturing Purchasing Managers’ Index (PMI) and new vehicle sales data for May showed that the economy is likely to perform better in Q2 compared to Q1. However, the first quarter GDP data to be released read moreIt was a busy week on the domestic data front. The manufacturing Purchasing Managers’ Index (PMI) and new vehicle sales data for May showed that the economy is likely to perform better in Q2 compared to Q1. However, the first quarter GDP data to be released tomorrow is likely to be a disappointingly weak print. In the international section, the focus is on the latest employment and inflation data from the US. The job figures came in better than expected, and with inflation remaining steady, this suggests that the US Federal Reserve (Fed) remains on track to hike its policy interest rate next week. BER Weekly, 28 May 2018 Last updated: May 28 2018 12:13PM In the Domestic section we review the latest interest rate decision by the Monetary Policy Committee (MPC) of the SA Reserve Bank (SARB), as well as consumer price inflation data for April. CPI inflation came in below expectations for April and while the MPC read moreIn the Domestic section we review the latest interest rate decision by the Monetary Policy Committee (MPC) of the SA Reserve Bank (SARB), as well as consumer price inflation data for April. CPI inflation came in below expectations for April and while the MPC judged the risks to the inflation outlook to be on the upside, the lower-than-expected print contributed to a mostly unchanged SARB headline CPI forecast. Finally, as expected, S&P Global Ratings kept its rating for SA’s sovereign debt unchanged at below investment grade. More on the rationale for this decision and the market reaction in the Markets section. In international news, we focus on the flash Purchasing Managers’ Indices (PMI) for May released around the world. In all, the preliminary numbers paint a mixed picture for global growth. BER Weekly, 21 May 2018 Last updated: May 21 2018 10:56AM Retail and wholesale sales data released by Statistics South Africa (Stats SA) over the week added to concerns of a sharp slowdown (and potentially even an outright contraction) in overall GDP growth in 2018Q1. While sales growth held up reasonably well on a read moreRetail and wholesale sales data released by Statistics South Africa (Stats SA) over the week added to concerns of a sharp slowdown (and potentially even an outright contraction) in overall GDP growth in 2018Q1. While sales growth held up reasonably well on a monthly basis in March, both the retail and wholesale sectors contracted during the first quarter. This adds to weak mining and manufacturing data. On the international front, activity data out of China and Japan also disappointed, providing further evidence of a marginal slowdown in global growth during 2018Q1. BER Weekly, 14 May 2018 Last updated: May 14 2018 11:42AM Last week, global financial markets were focused on US President Trump’s decision to re-impose economic sanctions on Iran. This decision pushed the oil price even higher. On a more positive note, somewhat lower-than-expected US inflation data for April eased read moreLast week, global financial markets were focused on US President Trump’s decision to re-impose economic sanctions on Iran. This decision pushed the oil price even higher. On a more positive note, somewhat lower-than-expected US inflation data for April eased fears that the Federal Reserve (Fed) may be more aggressive with future policy interest rate hikes. Meanwhile, the domestic economy is set up for a disappointing growth rate in the first quarter, as both manufacturing and mining output fell in this period. Read more below. In other global news, the Bank of England (BoE) held its policy interest rate unchanged. The dovish sentiment signals that UK interest rates could remain at current levels a bit longer. Besides this, China recorded a trade surplus in April, compared to a deficit in March. Importantly, the surplus with the US widened despite selected tariff hikes by the US. BER Weekly, 7 May 2018 Last updated: May 7 2018 11:30AM The domestic economy started the second quarter on a healthy foot, as indicated by an improvement in the Absa Purchasing Managers’ Index (PMI) and higher new vehicles sales in April. Furthermore, an increase in mineral exports to Asia contributed to an read moreThe domestic economy started the second quarter on a healthy foot, as indicated by an improvement in the Absa Purchasing Managers’ Index (PMI) and higher new vehicles sales in April. Furthermore, an increase in mineral exports to Asia contributed to an improvement in the trade balance at the end of the first quarter. In the international section, the focus is on the latest job figures from the US while PMI data for the major economies is also discussed. For the Eurozone, US and China, PMI-numbers registered levels above the neutral 50-point mark in April. This indicates that world growth retained its momentum at the start of the second quarter. In the US, besides release of the jobs data, the Federal Reserve (Fed) made no change to its policy interest rate, but confirmed that more hikes will follow. Meanwhile, in financial markets the US dollar continued to strengthen against major currencies and the rand, thereby also contributing to lower commodity prices. BER Weekly_23 April 2018 Last updated: Apr 23 2018 10:21AM Domestic financial markets reacted positively to the lower-than-expected March inflation print. BER Weekly, 16 April 2018 Last updated: Apr 16 2018 10:57AM Global geo-political concerns continued to dominate the news flow last week. Whereas the concerns about a trade war between the US and China eased after conciliatory remarks by the Chinese President, the situation in Syria continues to damage relations read moreGlobal geo-political concerns continued to dominate the news flow last week. Whereas the concerns about a trade war between the US and China eased after conciliatory remarks by the Chinese President, the situation in Syria continues to damage relations between the US and Russia. On the domestic front, manufacturing and mining data for February suggest that the contribution of these sectors to overall GDP growth in 2018Q1 will be limited, if not negative. This adds to the likelihood that quarterly GDP growth will slow significantly relative to the robust 2017Q4 print. Meanwhile, on the international front, higher US headline CPI in March confirmed the view of monetary authorities at the last Federal Open Market Committee (FOMC) meeting that underlying price pressure is building. BER Weekly, 9 April 2018 Last updated: Apr 9 2018 12:06PM International news headlines were dominated by escalating trade tensions between the US and China last week. This also had a bearing on domestic financial markets. More on this in the markets section.The focus of the domestic section is on the Absa Purchasing read moreInternational news headlines were dominated by escalating trade tensions between the US and China last week. This also had a bearing on domestic financial markets. More on this in the markets section.The focus of the domestic section is on the Absa Purchasing Managers’ Index (PMI) for March. The PMI suggests that the manufacturing sector may have come under renewed pressure as slower export growth weighed on overall demand. Furthermore, other data showed that domestic new vehicles sales ticked up slightly in March, but that vehicle exports declined for a second month. In the international section, we unpack the latest PMI figures from the US, China and the Eurozone as well as the latest US job numbers (the nonfarm payroll report). The nonfarm payrolls disappointed and significantly undershot the consensus forecast. BER Weekly, 26 March 2018 Last updated: Mar 26 2018 8:04AM Global and domestic financial markets had a lot to digest last week. The US central bank’s latest policy interest rate hike, as well as the guidance of future monetary tightening, dominated international headlines. Furthermore, the narrative surrounding the read moreGlobal and domestic financial markets had a lot to digest last week. The US central bank’s latest policy interest rate hike, as well as the guidance of future monetary tightening, dominated international headlines. Furthermore, the narrative surrounding the threat of global trade wars intensified after the US announced broadbased measures to curb imports from China. While these events had an impact on SA financial markets, local attention was more focused on Moody’s credit rating decision. BER Weekly, 19 March 2018 Last updated: Mar 19 2018 12:03PM Domestic economic data released last week was broadly upbeat. Manufacturing and mining output figures for January showed that annual growth in these sectors edged higher. In addition, business confidence in 2018Q1 registered its best level since the beginning read moreDomestic economic data released last week was broadly upbeat. Manufacturing and mining output figures for January showed that annual growth in these sectors edged higher. In addition, business confidence in 2018Q1 registered its best level since the beginning of 2015. On the international front, data from the US revealed continued soft retail sales growth in February. In addition, markets will this week keep a keen eye on the FOMC announcement as well as Moody’s decision regarding SA’s sovereign debt rating. BER Weekly, 12 March 2018 Last updated: Mar 12 2018 10:58AM In the domestic section, the focus is on the latest GDP growth data. Not only did the 2017Q4 figure surprise on the upside, but major data revisions to the historic data series meant that 2016’s growth rate was also revised higher. The revisions resulted in read moreIn the domestic section, the focus is on the latest GDP growth data. Not only did the 2017Q4 figure surprise on the upside, but major data revisions to the historic data series meant that 2016’s growth rate was also revised higher. The revisions resulted in significant changes in the composition of GDP growth over the past few years, which could have important implications for the growth pattern going forward. In the international section, the latest US job figures as well as US and Chinese trade data are unpacked. The stark difference between the US and China’s trade balances is one of the key reasons for President Donald Trump’s renewed focus on trade protectionism. US job figures were robust, although wage growth slowed. This boosted global stock markets – more on this in the markets section. BER Weekly, 5 March 2018 Last updated: Mar 5 2018 10:22AM Domestic data released last week was somewhat of a mixed bag. On the one hand, SA’s trade deficit ballooned to its worst level on record in January, while vehicle export data for February also remained depressed. However, on the positive side, the Absa read moreDomestic data released last week was somewhat of a mixed bag. On the one hand, SA’s trade deficit ballooned to its worst level on record in January, while vehicle export data for February also remained depressed. However, on the positive side, the Absa Purchasing Managers’ Index (PMI) managed to edge above the neutral 50-point mark for the first time since May 2017. These releases, as well as factory-gate inflation figures, are discussed in the domestic section. In the international section we also look at inflation figures, but from the consumer side. Furthermore, the section unpacks US Federal Reserve (Fed) Chair Jerome Powell’s first statement to congress and PMI data from China. BER Weekly, 26 February 2018 Last updated: Feb 26 2018 10:01AM The National Budget dominated domestic economic headlines last week. This is both because of the revenue and expenditure details, as well as indications that (along with other economic and political factors) the Budget did enough to stave off a Moody’s read moreThe National Budget dominated domestic economic headlines last week. This is both because of the revenue and expenditure details, as well as indications that (along with other economic and political factors) the Budget did enough to stave off a Moody’s ratings downgrade next month. More detail on this and the latest (January) consumer inflation print here. Internationally, according to the most recent preliminary Purchasing Managers’ Index (PMI) readings for February, global growth is expected to have remained well supported so far in 2018Q1. These, along with global inflation releases, are discussed here. BER Weekly, 19 February 2018 Last updated: Feb 19 2018 12:09PM It was a dramatic week on the local front with the resignation of former President Jacob Zuma, the swearing in of a new president, Cyril Ramaphosa, and the State of the Nation Address (SONA) on Friday. This follows weeks of speculation following Ramaphosa’s read moreIt was a dramatic week on the local front with the resignation of former President Jacob Zuma, the swearing in of a new president, Cyril Ramaphosa, and the State of the Nation Address (SONA) on Friday. This follows weeks of speculation following Ramaphosa’s ascension to the position of ANC president last December. In this edition of the weekly review, the focus is on the domestic labour market on the back of the Quarterly Labour Force Survey (QLFS) – which revealed a drop in the unemployment rate – as well as wholesale and retail trade sales data. This, along with a brief discussion of some of the highlights of President Ramaphosa’s first SONA. On the international front, inflation in both the US and UK was somewhat higher-than-expected in January. For the US, sustained above-consensus inflation prints will add further fuel to the argument that the policy interest rate may be raised by more than previously expected. BER Weekly, 12 February 2018 Last updated: Feb 12 2018 11:23AM Notable losses (and volatility) on global stock and bond markets dominated economic headlines last week. On the domestic front, Statistics South Africa (Stats SA) released mining and manufacturing output figures for December 2017. While manufacturing output read moreNotable losses (and volatility) on global stock and bond markets dominated economic headlines last week. On the domestic front, Statistics South Africa (Stats SA) released mining and manufacturing output figures for December 2017. While manufacturing output expanded at a faster pace, mining output growth moderated. The latest figures point to a positive contribution from the manufacturing sector to 2017Q4 GDP growth, while mining likely weighed on overall growth. For 2017 as a whole, mining output picked up while manufacturing output declined slightly. In international news, the Bank of England (BoE) kept its policy rate unchanged. However, officials did hint at the possibility of renewed tightening on the back of stronger global and UK growth, as well as rising inflation expectations. In China, the January Caixin Composite Purchasing Managers’ Index (PMI) pointed toward a strong start to 2018 following the slightly faster-than-expected expansion in overall economic activity during 2017. BER Weekly, 05 Feburary 2018 Last updated: Feb 5 2018 11:20AM In the domestic section, we unpack the latest survey data released by the BER, including the 2017Q4 FNB/BER Consumer Confidence Index (CCI) and the January Absa Purchasing Managers’ Index (PMI). While the survey results point to continued sluggish growth in read moreIn the domestic section, we unpack the latest survey data released by the BER, including the 2017Q4 FNB/BER Consumer Confidence Index (CCI) and the January Absa Purchasing Managers’ Index (PMI). While the survey results point to continued sluggish growth in domestic economic activity, there are signs that conditions could improve meaningfully as we head deeper into 2018. In the international section, we discuss the latest labour market data from the US, GDP data from the Eurozone and PMI data from China. In all, these releases point to a continued strengthening in the global economy. BER Weekly, 29 January 2018 Last updated: Jan 29 2018 12:24PM Given a relatively quiet week on the domestic data front, most attention continued to be focused on currency movements (see markets section). The domestic section highlights the latest consumer and producer price trends. Both measures accelerated marginally read moreGiven a relatively quiet week on the domestic data front, most attention continued to be focused on currency movements (see markets section). The domestic section highlights the latest consumer and producer price trends. Both measures accelerated marginally in December, mostly on the back of a significant rise in the price of petrol. However, for the full year of 2017, consumer and producer price growth was lower than in 2016. The international section deals with the latest flash Purchasing Managers’ Index (PMI), the European Central Bank (ECB) policy meeting and GDP growth numbers for the US and the UK. BER Weekly, 22 January 2018 Last updated: Jan 22 2018 2:03PM Among domestic economic news last week was the SA Reserve Bank (SARB) interest rate announcement on Thursday. As expected, the repurchase (repo) rate remained unchanged. The decision was accompanied by a downward revision to the Bank’s inflation forecast and read moreAmong domestic economic news last week was the SA Reserve Bank (SARB) interest rate announcement on Thursday. As expected, the repurchase (repo) rate remained unchanged. The decision was accompanied by a downward revision to the Bank’s inflation forecast and upward adjustment to the growth forecast. Besides monetary policy, domestic retail sales and mining production numbers are also discussed in the domestic section. On the international front, China published its GDP number for the fourth quarter, which was better than expected and in step with the general global upswing. Meanwhile, US consumers felt slightly less optimistic in January, despite the new tax cuts. The major story in domestic financial markets remained the continued strengthening in the value of the rand exchange rate. BER Weekly, 15 January 2018 Last updated: Jan 15 2018 11:50AM The ANC elective conference dominated the local news headlines over the past few weeks. We discuss the market reaction following the outcome of the conference in the markets section below. On the domestic data front, the key releases over the past weeks read moreThe ANC elective conference dominated the local news headlines over the past few weeks. We discuss the market reaction following the outcome of the conference in the markets section below. On the domestic data front, the key releases over the past weeks were official manufacturing statistics for November as well as the Absa Purchasing Managers’ Index (PMI) for December. While the November output data came out better than expected, the PMI results were disappointing. In sharp contrast, the global economy ended the year on a high note. The J.P. Morgan global manufacturing PMI came in at a near seven-year high in December. The more recent global real economy data confirmed the robustness reflected in the survey data and will be discussed in the international section below.
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. 2018 2017 2016 2015 2014 2013 BER Weekly, 10 December Last updated: Dec 10 2018 10:56AM Dominating the domestic headlines last week was the news that South Africa exited a technical recession in 2018Q3. While this was widely expected, the pace of GDP growth surprised on the upside. More on this in the domestic section. After the release of some read moreDominating the domestic headlines last week was the news that South Africa exited a technical recession in 2018Q3. While this was widely expected, the pace of GDP growth surprised on the upside. More on this in the domestic section. After the release of some survey data for the fourth quarter (see domestic section for details), a spate of actual activity data releases this week will provide further guidance on how GDP growth performed in 2018Q4. On the international front, US employment data rose by less than expected in November while the international trade balance data for October recorded the biggest deficit in ten years. This, as well as PMI data from China, is discussed here. BER Weekly, 3 December Last updated: Dec 3 2018 11:28AM In the domestic section we unpack the latest BER consumer and business confidence numbers. The latest reading for the Absa Purchasing Managers’ Index (PMI) and producer price inflation figures for October are also discussed. On the international front, PMI read moreIn the domestic section we unpack the latest BER consumer and business confidence numbers. The latest reading for the Absa Purchasing Managers’ Index (PMI) and producer price inflation figures for October are also discussed. On the international front, PMI data confirms that Chinese growth continues to slow, while comments by US Federal Reserve officials point toward a possibly more dovish interest rate stance for the US central bank. BER Weekly, 26 November Last updated: Nov 26 2018 10:04AM On the domestic front, the main focus was on the South African Reserve Bank’s (SARB) monetary policy decision last week. The SARB decided to hike the interest rate by 25 basis points (bps) after a rigorous debate. The decision mainly hinged on sustained read moreOn the domestic front, the main focus was on the South African Reserve Bank’s (SARB) monetary policy decision last week. The SARB decided to hike the interest rate by 25 basis points (bps) after a rigorous debate. The decision mainly hinged on sustained higher inflation going forward (with further upside risks) and the bank hoping to prevent more aggressive rate hikes in the future by acting now. On a positive note, the Brent crude oil price continued its steady decline last week, which means local consumers may see some relief on the petrol price front next month – see the markets section. In the international section, we unpack the latest flash Purchasing Managers’ Index (PMI) figures from the Eurozone and the US. The PMI suggests that growth is continuing to trend lower in the Eurozone, but remains solid in the US. The section also briefly refers to the Brexit deal endorsed by the European Union (EU) over the weekend. BER Weekly, 19 November Last updated: Nov 19 2018 11:21AM In market news, the rand exchange rate took the Constitutional Review Committee’s decision to propose an amendment to Section 25 of the Constitution to allow expropriation without compensation (EWC) in its stride. Globally, the focus was on the chaotic Brexit read moreIn market news, the rand exchange rate took the Constitutional Review Committee’s decision to propose an amendment to Section 25 of the Constitution to allow expropriation without compensation (EWC) in its stride. Globally, the focus was on the chaotic Brexit negotiations. On the data front, we unpack the latest retail, wholesale and motor trade data in the domestic section. Sales came in stronger than expected across most categories. Combined with an expected improvement in agricultural output and the rebound in manufacturing output, this should help lift the economy out of recession in Q3. In the international section we discuss the latest GDP data out of Germany and Japan, along with inflation data from the US and the UK. BER Weekly, 12 November Last updated: Nov 12 2018 9:39AM In the absence of major market-moving local data releases last week, South African financial market moves were dominated by gyrations on global markets. In the domestic section, we unpack the latest mining and manufacturing output data from Statistics South read moreIn the absence of major market-moving local data releases last week, South African financial market moves were dominated by gyrations on global markets. In the domestic section, we unpack the latest mining and manufacturing output data from Statistics South Africa (Stats SA). The September prints confirm our view that the economy likely exited the technical recession in Q3, but growth is expected to have remained weak. On the international front, the focus is on the latest monetary policy decision by the US Federal Reserve (Fed), UK GDP figures as well as the latest international trade data from China. The Chinese trade data reflected strong growth in exports, which is set to slow when additional US trade tariffs likely kick in early next year. The markets section explains the drivers of the see-sawing rand exchange rate, which managed to dip below R14/$ mid-week, but weakened again at the end of the week. BER Weekly, 5 November Last updated: Nov 5 2018 10:33AM Various domestic economic indicators were published last week - mostly reflecting tough conditions. On the negative side, the unemployment rate increased, the trade balance swung into a deficit and the Absa PMI declined. An increase in the sale of commercial read moreVarious domestic economic indicators were published last week - mostly reflecting tough conditions. On the negative side, the unemployment rate increased, the trade balance swung into a deficit and the Absa PMI declined. An increase in the sale of commercial vehicles was the exception on the positive side. Internationally, preliminary indications are that the Eurozone economy continued to lose momentum in the third quarter. Meanwhile, policy makers at the central banks of Japan and the UK made no changes to their key interest rates. Lastly, in the US, nonfarm payroll data signalled a healthy labour market with rising wages, enforcing expectations for another Federal Reserve Bank (Fed) policy rate hike in December. In financial markets, the domestic equity market tracked global bourses higher to recover strongly from recent losses. BER Weekly, 29 October Last updated: Oct 29 2018 12:11PM As cautioned in the previous edition of the Weekly, the rand exchange rate and government bond yields were under pressure towards the end of last week (see markets section). This was after Finance Minister Tito Mboweni tabled his maiden Medium Term Budget read moreAs cautioned in the previous edition of the Weekly, the rand exchange rate and government bond yields were under pressure towards the end of last week (see markets section). This was after Finance Minister Tito Mboweni tabled his maiden Medium Term Budget Policy Statement (MTBPS) in parliament. The headline fiscal ratios showed a notable deterioration compared to the February Budget, which was negative for domestic financial markets. On a positive note, the minister’s speech candidly stipulated the steps SA needs to take in order to overcome some significant challenges. Clients can read more in our comment. Besides the MTBPS, Stats SA released the consumer and producer inflation numbers for September; read more below. Internationally, flash Purchasing Managers’ Indices (PMI) from the US and the Eurozone were published for October by Markit. These indicate that growth in the US economy is still vibrant, while the Eurozone continues to lose momentum. However, the European Central Bank (ECB) remains optimistic about the region and expects to start tightening monetary policy next year. BER Weekly, 22 October 2018 Last updated: Oct 22 2018 11:02AM Domestic data last week was a mixed bag. While retail and wholesale trade data for August was reasonably upbeat, mining production continued to underwhelm. On the international front, the minutes of the September Federal Open Market Committee (FOMC) revealed read moreDomestic data last week was a mixed bag. While retail and wholesale trade data for August was reasonably upbeat, mining production continued to underwhelm. On the international front, the minutes of the September Federal Open Market Committee (FOMC) revealed a somewhat more hawkish view on the future path of the policy interest rate while at the same time highlighting downside risks to growth. This week, the domestic focus will be squarely on the Medium Term Budget Policy Statement (MTBPS). Clients can expect a comprehensive overview after the event. BER Weekly, 15 October Last updated: Oct 15 2018 11:47AM Domestic headlines last week were focused on the resignation of Nhlanhla Nene as finance minister and the appointment of former Reserve Bank governor Tito Mboweni as his replacement. Along with the gyrations of the US dollar, much of the local currency’s read moreDomestic headlines last week were focused on the resignation of Nhlanhla Nene as finance minister and the appointment of former Reserve Bank governor Tito Mboweni as his replacement. Along with the gyrations of the US dollar, much of the local currency’s fluctuations were tied to these developments, especially with the Medium Term Budget Policy Statement (MTBPS) looming . Meanwhile, on the global data front, inflation pressure eased in the US in September. Both producer and consumer inflation recorded slower growth on an annual basis. BER Weekly, 8 October Last updated: Oct 8 2018 11:16AM In a quiet week on the domestic data front, local financial markets took direction from US dollar strength and higher US bond yields. In the domestic section, we unpack the latest vehicle sales data. We also discuss the BER’s revised forecast for real GDP read moreIn a quiet week on the domestic data front, local financial markets took direction from US dollar strength and higher US bond yields. In the domestic section, we unpack the latest vehicle sales data. We also discuss the BER’s revised forecast for real GDP growth for the period 2018 to 2020. The combination of weak GDP prints in 2018H1 and several other adverse developments have necessitated a significant downward revision to our outlook for 2018/19. In the international section we discuss the latest non-farm payroll report out of the US, which points to continued improvements in the labour market. We also look at the latest reading for the JP Morgan Global Manufacturing Purchasing Managers’ Index (PMI) for a clue regarding the stance of the global economy. BER Weekly, 1 October Last updated: Oct 1 2018 11:35AM There was a raft of domestic data releases last week, including the Absa Purchasing Managers’ Index (PMI), and Producer Price Index (PPI) and employment data from Statistics South Africa (Stats SA). These data releases, among others, are unpacked in the read moreThere was a raft of domestic data releases last week, including the Absa Purchasing Managers’ Index (PMI), and Producer Price Index (PPI) and employment data from Statistics South Africa (Stats SA). These data releases, among others, are unpacked in the domestic section. On the international front, we discuss the latest interest rate decision by the US Federal Reserve (Fed). The Fed hiked its main policy interest rate and the accompanying statement suggest that further gradual increases are likely. BER Weekly, 21 September Last updated: Sep 21 2018 1:20PM Domestically, the focus was on the interest rate decision by the Monetary Policy Committee (MPC) of the SA Reserve Bank (SARB) yesterday. Concerns about the weak state of the real economy and (more importantly) the lack of demand-side pressure on inflation read moreDomestically, the focus was on the interest rate decision by the Monetary Policy Committee (MPC) of the SA Reserve Bank (SARB) yesterday. Concerns about the weak state of the real economy and (more importantly) the lack of demand-side pressure on inflation drove the MPC to keep rates unchanged. Furthermore, inflation and inflation expectations remain relatively contained. We also discuss the stimulus plan announced by President Cyril Ramaphosa on Friday morning. The international section looks at the latest consumer inflation prints in the Eurozone (EZ) and the United Kingdom (UK). The markets section unpacks reasons why the rand strengthened over the last week. BER Weekly, 17 September Last updated: Sep 17 2018 10:56AM Last week, Statistics South Africa (Stats SA) released key data on the health of the SA economy at the start of Q3. The data proved to be a mixed bag, with mining output disappointing while manufacturing performed much better than expected. The international read moreLast week, Statistics South Africa (Stats SA) released key data on the health of the SA economy at the start of Q3. The data proved to be a mixed bag, with mining output disappointing while manufacturing performed much better than expected. The international section looks at industrial production figures from the US, Eurozone and UK. Furthermore, we unpack the interest rate decisions of several central banks. The most remarkable decision was Turkey’s central bank call to hike its interest rate by 625 basis points. This move was welcomed by markets and also lifted spirits towards the rand – more on this in the markets section. BER Weekly, 10 September Last updated: Sep 10 2018 11:22AM Last week saw domestic financial markets remain under pressure. The rand exchange rate weakened further as Stats SA reported that the domestic economy entered a technical recession in the second quarter of 2018. Among the economic subsectors, the contraction read moreLast week saw domestic financial markets remain under pressure. The rand exchange rate weakened further as Stats SA reported that the domestic economy entered a technical recession in the second quarter of 2018. Among the economic subsectors, the contraction was most severe in the agriculture, trade and transport sectors. Only the mining and finance sectors were able to register significant positive growth. The improvement in mining came on the back of a surge in mineral exports, contributing to a trade surplus during the second quarter, which in turn led to an improvement in the current account deficit. Internationally, the latest trade data from China and the US points toward no relief of the ongoing ‘trade war’ between the two super powers. China’s trade surplus with the US reached an all-time high in August. Meanwhile, nonfarm payroll data released on Friday indicates a healthy US labour market, with accelerating wage increases BER Weekly, 3 September Last updated: Sep 3 2018 11:11AM Economic data released last week and this morning reflects a domestic economy that is currently in a weakened state. In August, the manufacturing sector suffered a sharp decline in new sales orders, coupled with a drop in business activity, as indicated by read moreEconomic data released last week and this morning reflects a domestic economy that is currently in a weakened state. In August, the manufacturing sector suffered a sharp decline in new sales orders, coupled with a drop in business activity, as indicated by the Absa Purchasing Managers’ Index (PMI). Added to this, credit extension slowed down to levels on par with consumer inflation, implying no growth in real terms. Internationally, we briefly discuss the financial crises unfolding in Argentina and Turkey. The section also unpacks data releases from the US, Eurozone and China. The markets section extends the focus to the financial implications of the troubles in Argentina and Turkey, which also impacted the currencies of South Africa (SA) and India. Besides these, local share prices were affected by a regulatory dispute with Nigeria, slashing the price of MTN BER Weekly, 27 August 2018 Last updated: Aug 27 2018 11:01AM A spate of flash PMI data for August was released last week which confirmed that growth in developed economies remains well supported. The focus on the domestic side was on the July consumer inflation numbers. An acceleration to 5.1% y-o-y was recorded, in read moreA spate of flash PMI data for August was released last week which confirmed that growth in developed economies remains well supported. The focus on the domestic side was on the July consumer inflation numbers. An acceleration to 5.1% y-o-y was recorded, in part as a result of the rising price of petrol. BER Weekly_20 August 2018 Last updated: Aug 20 2018 12:08PM Global and domestic financial markets saw wild swings last week as the deteriorating situation in Turkey spilled over to other emerging market currencies, most notably the rand exchange rate. BER Weekly, 13 August 2018 Last updated: Aug 13 2018 10:36AM It was a quiet week on the domestic data front, with only manufacturing production for June released. However, there were significant moves on domestic financial markets in the holiday-shortened week, with the rand exchange rate under significant pressure. read moreIt was a quiet week on the domestic data front, with only manufacturing production for June released. However, there were significant moves on domestic financial markets in the holiday-shortened week, with the rand exchange rate under significant pressure. Increased geopolitical tension and a general risk-off trading environment weighed on emerging market assets, including the rand and Turkish lira, over the week. More on this in the markets section. In other news, on Friday National Treasury released the report of the committee tasked to review the basket of goods excluded from Value Added Tax (VAT). The main recommendations are outlined in the current affairs section. On the international front, overall economic activity picked up in Japan and the UK in 2018Q2 as reflected in the latest GDP prints. China’s trade surplus with the US shrank marginally in July but will likely not be enough to alleviate US-China tensions. In fact, President Donald Trump announced new tariffs to be implemented later in August with his Chinese counterpart vowing to follow suit. Finally, US core inflation accelerated, fuelling expectations for a rate hike in September. BER Weekly, 6 August 2018 Last updated: Aug 6 2018 11:05AM A mixed bag of data releases on the domestic front last week indicate that domestic economic activity remains under pressure. On the positive side, the Absa Purchasing Managers’ Index (PMI) ticked up to above the neutral 50-point mark in July, while strong read moreA mixed bag of data releases on the domestic front last week indicate that domestic economic activity remains under pressure. On the positive side, the Absa Purchasing Managers’ Index (PMI) ticked up to above the neutral 50-point mark in July, while strong export growth in June led to an improvement in the overall external trade balance. On the other hand, vehicle exports struggled in July, while the unemployment rate increased in 2018Q2 on the back of lacklustre employment growth. In international news, we focus on the latest round of monetary policy decisions from the developed world, activity indicators from China and the Eurozone, as well labour market data out of the US. BER Weekly, 30 July 2018 Last updated: Jul 30 2018 10:42AM The domestic economic data calendar was very light last week, with the only notable release being producer inflation for June. This morning, we saw the release of credit growth statistics for June. On domestic financial markets, the rand exchange rate was read moreThe domestic economic data calendar was very light last week, with the only notable release being producer inflation for June. This morning, we saw the release of credit growth statistics for June. On domestic financial markets, the rand exchange rate was supported by the announcement that China plans to invest almost $15bn in the SA economy, while Eskom secured a R33bn loan from China’s Development Bank. In the international section, we have a look at the US GDP figure for Q2. As expected, growth accelerated notably from Q1. The section further unpacks the latest flash Purchasing Managers’ Index (PMI) releases for the US and the Eurozone. BER Weekly, 23 July 2018 Last updated: Jul 23 2018 10:45AM Locally, the focus was on the South African Reserve Bank’s (SARB) policy interest rate decision. As expected, the SARB kept the rate unchanged, but the overall tone of the statement was fairly hawkish. In addition, we unpack the latest retail and wholesale read moreLocally, the focus was on the South African Reserve Bank’s (SARB) policy interest rate decision. As expected, the SARB kept the rate unchanged, but the overall tone of the statement was fairly hawkish. In addition, we unpack the latest retail and wholesale trade data as well as the June inflation print. On the international front, the focus is also on inflation figures from the Eurozone and the United Kingdom. The section further summarises the latest industrial production and retail sales data from the US, which both point to a strong Q2 GDP print. BER Weekly, 16 July 2016 Last updated: Jul 16 2018 11:09AM In domestic news, both mining and manufacturing output rebounded in May after posting weak growth in April. However, mining output is still set to contract in 2018Q2, while only a slight rebound is on the cards for manufacturing production as output growth read moreIn domestic news, both mining and manufacturing output rebounded in May after posting weak growth in April. However, mining output is still set to contract in 2018Q2, while only a slight rebound is on the cards for manufacturing production as output growth remains lacklustre. Furthermore, the near-term outlook for the mining sector is clouded by the possibility of labour unrest following the commencement of wage negotiations in the gold sector. On the international front, US consumer price inflation rose to a six-year high in June, suggesting further interest rates hikes remain firmly on the cards. Across the pacific, China’s trade surplus with the US rose to a record-high in June which could provide further ammunition for President Trump in the ongoing trade dispute. BER Weekly, 9 July 2018 Last updated: Jul 9 2018 12:36PM On the domestic front, economic news was a mixed bag last week. On the upside, domestic vehicle sales continued to grow, especially in the case of heavy vehicles such as trucks and buses. On the downside, electricity output remained under pressure. On the read moreOn the domestic front, economic news was a mixed bag last week. On the upside, domestic vehicle sales continued to grow, especially in the case of heavy vehicles such as trucks and buses. On the downside, electricity output remained under pressure. On the international scene, nonfarm payroll data indicates that the US economy is still creating new jobs at a steady rate. Meanwhile, June Purchasing Managers’ Indices (PMIs) for the US and China reflect a vibrant economy in the US during the second quarter, and ‘business as usual’ in China. Furthermore, the IMF scaled down its outlook for the German economy. On financial markets the US dollar lost some ground after Chinese officials said they will not use the yuan as a trade-policy weapon, benefiting emerging market (EM) currencies to some extent. BER Weekly_2 July Last updated: Jul 3 2018 10:15AM No description available BER Weekly_25 June 2018 Last updated: Jun 25 2018 11:01AM The rand hit a 7-month low against the US dollar last week as emerging market assets continued to suffer. BER Weekly_18 June 2018 Last updated: Jun 18 2018 12:00PM A raft of domestic data released last week suggested that, after a poor first quarter, the SA economy remained under pressure at the start of 2018Q2. BER Weekly, 11 June 2018 Last updated: Jun 11 2018 10:39AM Over the weekend, welcome news broke that the majority of public sector trade unions had signed a multi-year wage deal with the government. Unfortunately, the costs are significantly more than budgeted for by National Treasury in the February Budget. This read moreOver the weekend, welcome news broke that the majority of public sector trade unions had signed a multi-year wage deal with the government. Unfortunately, the costs are significantly more than budgeted for by National Treasury in the February Budget. This means that the government is faced with some tough choices. The fact that GDP growth disappointed in Q1 and suggests that full-year growth could be lower than forecast by Treasury further complicates matters. This, as well as the latest manufacturing output data, is unpacked in the domestic section. On the international data front, the major releases focussed on trade and the outcomes were essentially fuel on the fire of the trade-war rhetoric coming from the US. The big US trade deficit remains one of US President Donald Trump’s pet peeves. Trump made this clear again on a Twitter rant in the wake of the weekend’s G7 meeting in Canada. BER Weekly, 4 June 2018 Last updated: Jun 4 2018 11:01AM It was a busy week on the domestic data front. The manufacturing Purchasing Managers’ Index (PMI) and new vehicle sales data for May showed that the economy is likely to perform better in Q2 compared to Q1. However, the first quarter GDP data to be released read moreIt was a busy week on the domestic data front. The manufacturing Purchasing Managers’ Index (PMI) and new vehicle sales data for May showed that the economy is likely to perform better in Q2 compared to Q1. However, the first quarter GDP data to be released tomorrow is likely to be a disappointingly weak print. In the international section, the focus is on the latest employment and inflation data from the US. The job figures came in better than expected, and with inflation remaining steady, this suggests that the US Federal Reserve (Fed) remains on track to hike its policy interest rate next week. BER Weekly, 28 May 2018 Last updated: May 28 2018 12:13PM In the Domestic section we review the latest interest rate decision by the Monetary Policy Committee (MPC) of the SA Reserve Bank (SARB), as well as consumer price inflation data for April. CPI inflation came in below expectations for April and while the MPC read moreIn the Domestic section we review the latest interest rate decision by the Monetary Policy Committee (MPC) of the SA Reserve Bank (SARB), as well as consumer price inflation data for April. CPI inflation came in below expectations for April and while the MPC judged the risks to the inflation outlook to be on the upside, the lower-than-expected print contributed to a mostly unchanged SARB headline CPI forecast. Finally, as expected, S&P Global Ratings kept its rating for SA’s sovereign debt unchanged at below investment grade. More on the rationale for this decision and the market reaction in the Markets section. In international news, we focus on the flash Purchasing Managers’ Indices (PMI) for May released around the world. In all, the preliminary numbers paint a mixed picture for global growth. BER Weekly, 21 May 2018 Last updated: May 21 2018 10:56AM Retail and wholesale sales data released by Statistics South Africa (Stats SA) over the week added to concerns of a sharp slowdown (and potentially even an outright contraction) in overall GDP growth in 2018Q1. While sales growth held up reasonably well on a read moreRetail and wholesale sales data released by Statistics South Africa (Stats SA) over the week added to concerns of a sharp slowdown (and potentially even an outright contraction) in overall GDP growth in 2018Q1. While sales growth held up reasonably well on a monthly basis in March, both the retail and wholesale sectors contracted during the first quarter. This adds to weak mining and manufacturing data. On the international front, activity data out of China and Japan also disappointed, providing further evidence of a marginal slowdown in global growth during 2018Q1. BER Weekly, 14 May 2018 Last updated: May 14 2018 11:42AM Last week, global financial markets were focused on US President Trump’s decision to re-impose economic sanctions on Iran. This decision pushed the oil price even higher. On a more positive note, somewhat lower-than-expected US inflation data for April eased read moreLast week, global financial markets were focused on US President Trump’s decision to re-impose economic sanctions on Iran. This decision pushed the oil price even higher. On a more positive note, somewhat lower-than-expected US inflation data for April eased fears that the Federal Reserve (Fed) may be more aggressive with future policy interest rate hikes. Meanwhile, the domestic economy is set up for a disappointing growth rate in the first quarter, as both manufacturing and mining output fell in this period. Read more below. In other global news, the Bank of England (BoE) held its policy interest rate unchanged. The dovish sentiment signals that UK interest rates could remain at current levels a bit longer. Besides this, China recorded a trade surplus in April, compared to a deficit in March. Importantly, the surplus with the US widened despite selected tariff hikes by the US. BER Weekly, 7 May 2018 Last updated: May 7 2018 11:30AM The domestic economy started the second quarter on a healthy foot, as indicated by an improvement in the Absa Purchasing Managers’ Index (PMI) and higher new vehicles sales in April. Furthermore, an increase in mineral exports to Asia contributed to an read moreThe domestic economy started the second quarter on a healthy foot, as indicated by an improvement in the Absa Purchasing Managers’ Index (PMI) and higher new vehicles sales in April. Furthermore, an increase in mineral exports to Asia contributed to an improvement in the trade balance at the end of the first quarter. In the international section, the focus is on the latest job figures from the US while PMI data for the major economies is also discussed. For the Eurozone, US and China, PMI-numbers registered levels above the neutral 50-point mark in April. This indicates that world growth retained its momentum at the start of the second quarter. In the US, besides release of the jobs data, the Federal Reserve (Fed) made no change to its policy interest rate, but confirmed that more hikes will follow. Meanwhile, in financial markets the US dollar continued to strengthen against major currencies and the rand, thereby also contributing to lower commodity prices. BER Weekly_23 April 2018 Last updated: Apr 23 2018 10:21AM Domestic financial markets reacted positively to the lower-than-expected March inflation print. BER Weekly, 16 April 2018 Last updated: Apr 16 2018 10:57AM Global geo-political concerns continued to dominate the news flow last week. Whereas the concerns about a trade war between the US and China eased after conciliatory remarks by the Chinese President, the situation in Syria continues to damage relations read moreGlobal geo-political concerns continued to dominate the news flow last week. Whereas the concerns about a trade war between the US and China eased after conciliatory remarks by the Chinese President, the situation in Syria continues to damage relations between the US and Russia. On the domestic front, manufacturing and mining data for February suggest that the contribution of these sectors to overall GDP growth in 2018Q1 will be limited, if not negative. This adds to the likelihood that quarterly GDP growth will slow significantly relative to the robust 2017Q4 print. Meanwhile, on the international front, higher US headline CPI in March confirmed the view of monetary authorities at the last Federal Open Market Committee (FOMC) meeting that underlying price pressure is building. BER Weekly, 9 April 2018 Last updated: Apr 9 2018 12:06PM International news headlines were dominated by escalating trade tensions between the US and China last week. This also had a bearing on domestic financial markets. More on this in the markets section.The focus of the domestic section is on the Absa Purchasing read moreInternational news headlines were dominated by escalating trade tensions between the US and China last week. This also had a bearing on domestic financial markets. More on this in the markets section.The focus of the domestic section is on the Absa Purchasing Managers’ Index (PMI) for March. The PMI suggests that the manufacturing sector may have come under renewed pressure as slower export growth weighed on overall demand. Furthermore, other data showed that domestic new vehicles sales ticked up slightly in March, but that vehicle exports declined for a second month. In the international section, we unpack the latest PMI figures from the US, China and the Eurozone as well as the latest US job numbers (the nonfarm payroll report). The nonfarm payrolls disappointed and significantly undershot the consensus forecast. BER Weekly, 26 March 2018 Last updated: Mar 26 2018 8:04AM Global and domestic financial markets had a lot to digest last week. The US central bank’s latest policy interest rate hike, as well as the guidance of future monetary tightening, dominated international headlines. Furthermore, the narrative surrounding the read moreGlobal and domestic financial markets had a lot to digest last week. The US central bank’s latest policy interest rate hike, as well as the guidance of future monetary tightening, dominated international headlines. Furthermore, the narrative surrounding the threat of global trade wars intensified after the US announced broadbased measures to curb imports from China. While these events had an impact on SA financial markets, local attention was more focused on Moody’s credit rating decision. BER Weekly, 19 March 2018 Last updated: Mar 19 2018 12:03PM Domestic economic data released last week was broadly upbeat. Manufacturing and mining output figures for January showed that annual growth in these sectors edged higher. In addition, business confidence in 2018Q1 registered its best level since the beginning read moreDomestic economic data released last week was broadly upbeat. Manufacturing and mining output figures for January showed that annual growth in these sectors edged higher. In addition, business confidence in 2018Q1 registered its best level since the beginning of 2015. On the international front, data from the US revealed continued soft retail sales growth in February. In addition, markets will this week keep a keen eye on the FOMC announcement as well as Moody’s decision regarding SA’s sovereign debt rating. BER Weekly, 12 March 2018 Last updated: Mar 12 2018 10:58AM In the domestic section, the focus is on the latest GDP growth data. Not only did the 2017Q4 figure surprise on the upside, but major data revisions to the historic data series meant that 2016’s growth rate was also revised higher. The revisions resulted in read moreIn the domestic section, the focus is on the latest GDP growth data. Not only did the 2017Q4 figure surprise on the upside, but major data revisions to the historic data series meant that 2016’s growth rate was also revised higher. The revisions resulted in significant changes in the composition of GDP growth over the past few years, which could have important implications for the growth pattern going forward. In the international section, the latest US job figures as well as US and Chinese trade data are unpacked. The stark difference between the US and China’s trade balances is one of the key reasons for President Donald Trump’s renewed focus on trade protectionism. US job figures were robust, although wage growth slowed. This boosted global stock markets – more on this in the markets section. BER Weekly, 5 March 2018 Last updated: Mar 5 2018 10:22AM Domestic data released last week was somewhat of a mixed bag. On the one hand, SA’s trade deficit ballooned to its worst level on record in January, while vehicle export data for February also remained depressed. However, on the positive side, the Absa read moreDomestic data released last week was somewhat of a mixed bag. On the one hand, SA’s trade deficit ballooned to its worst level on record in January, while vehicle export data for February also remained depressed. However, on the positive side, the Absa Purchasing Managers’ Index (PMI) managed to edge above the neutral 50-point mark for the first time since May 2017. These releases, as well as factory-gate inflation figures, are discussed in the domestic section. In the international section we also look at inflation figures, but from the consumer side. Furthermore, the section unpacks US Federal Reserve (Fed) Chair Jerome Powell’s first statement to congress and PMI data from China. BER Weekly, 26 February 2018 Last updated: Feb 26 2018 10:01AM The National Budget dominated domestic economic headlines last week. This is both because of the revenue and expenditure details, as well as indications that (along with other economic and political factors) the Budget did enough to stave off a Moody’s read moreThe National Budget dominated domestic economic headlines last week. This is both because of the revenue and expenditure details, as well as indications that (along with other economic and political factors) the Budget did enough to stave off a Moody’s ratings downgrade next month. More detail on this and the latest (January) consumer inflation print here. Internationally, according to the most recent preliminary Purchasing Managers’ Index (PMI) readings for February, global growth is expected to have remained well supported so far in 2018Q1. These, along with global inflation releases, are discussed here. BER Weekly, 19 February 2018 Last updated: Feb 19 2018 12:09PM It was a dramatic week on the local front with the resignation of former President Jacob Zuma, the swearing in of a new president, Cyril Ramaphosa, and the State of the Nation Address (SONA) on Friday. This follows weeks of speculation following Ramaphosa’s read moreIt was a dramatic week on the local front with the resignation of former President Jacob Zuma, the swearing in of a new president, Cyril Ramaphosa, and the State of the Nation Address (SONA) on Friday. This follows weeks of speculation following Ramaphosa’s ascension to the position of ANC president last December. In this edition of the weekly review, the focus is on the domestic labour market on the back of the Quarterly Labour Force Survey (QLFS) – which revealed a drop in the unemployment rate – as well as wholesale and retail trade sales data. This, along with a brief discussion of some of the highlights of President Ramaphosa’s first SONA. On the international front, inflation in both the US and UK was somewhat higher-than-expected in January. For the US, sustained above-consensus inflation prints will add further fuel to the argument that the policy interest rate may be raised by more than previously expected. BER Weekly, 12 February 2018 Last updated: Feb 12 2018 11:23AM Notable losses (and volatility) on global stock and bond markets dominated economic headlines last week. On the domestic front, Statistics South Africa (Stats SA) released mining and manufacturing output figures for December 2017. While manufacturing output read moreNotable losses (and volatility) on global stock and bond markets dominated economic headlines last week. On the domestic front, Statistics South Africa (Stats SA) released mining and manufacturing output figures for December 2017. While manufacturing output expanded at a faster pace, mining output growth moderated. The latest figures point to a positive contribution from the manufacturing sector to 2017Q4 GDP growth, while mining likely weighed on overall growth. For 2017 as a whole, mining output picked up while manufacturing output declined slightly. In international news, the Bank of England (BoE) kept its policy rate unchanged. However, officials did hint at the possibility of renewed tightening on the back of stronger global and UK growth, as well as rising inflation expectations. In China, the January Caixin Composite Purchasing Managers’ Index (PMI) pointed toward a strong start to 2018 following the slightly faster-than-expected expansion in overall economic activity during 2017. BER Weekly, 05 Feburary 2018 Last updated: Feb 5 2018 11:20AM In the domestic section, we unpack the latest survey data released by the BER, including the 2017Q4 FNB/BER Consumer Confidence Index (CCI) and the January Absa Purchasing Managers’ Index (PMI). While the survey results point to continued sluggish growth in read moreIn the domestic section, we unpack the latest survey data released by the BER, including the 2017Q4 FNB/BER Consumer Confidence Index (CCI) and the January Absa Purchasing Managers’ Index (PMI). While the survey results point to continued sluggish growth in domestic economic activity, there are signs that conditions could improve meaningfully as we head deeper into 2018. In the international section, we discuss the latest labour market data from the US, GDP data from the Eurozone and PMI data from China. In all, these releases point to a continued strengthening in the global economy. BER Weekly, 29 January 2018 Last updated: Jan 29 2018 12:24PM Given a relatively quiet week on the domestic data front, most attention continued to be focused on currency movements (see markets section). The domestic section highlights the latest consumer and producer price trends. Both measures accelerated marginally read moreGiven a relatively quiet week on the domestic data front, most attention continued to be focused on currency movements (see markets section). The domestic section highlights the latest consumer and producer price trends. Both measures accelerated marginally in December, mostly on the back of a significant rise in the price of petrol. However, for the full year of 2017, consumer and producer price growth was lower than in 2016. The international section deals with the latest flash Purchasing Managers’ Index (PMI), the European Central Bank (ECB) policy meeting and GDP growth numbers for the US and the UK. BER Weekly, 22 January 2018 Last updated: Jan 22 2018 2:03PM Among domestic economic news last week was the SA Reserve Bank (SARB) interest rate announcement on Thursday. As expected, the repurchase (repo) rate remained unchanged. The decision was accompanied by a downward revision to the Bank’s inflation forecast and read moreAmong domestic economic news last week was the SA Reserve Bank (SARB) interest rate announcement on Thursday. As expected, the repurchase (repo) rate remained unchanged. The decision was accompanied by a downward revision to the Bank’s inflation forecast and upward adjustment to the growth forecast. Besides monetary policy, domestic retail sales and mining production numbers are also discussed in the domestic section. On the international front, China published its GDP number for the fourth quarter, which was better than expected and in step with the general global upswing. Meanwhile, US consumers felt slightly less optimistic in January, despite the new tax cuts. The major story in domestic financial markets remained the continued strengthening in the value of the rand exchange rate. BER Weekly, 15 January 2018 Last updated: Jan 15 2018 11:50AM The ANC elective conference dominated the local news headlines over the past few weeks. We discuss the market reaction following the outcome of the conference in the markets section below. On the domestic data front, the key releases over the past weeks read moreThe ANC elective conference dominated the local news headlines over the past few weeks. We discuss the market reaction following the outcome of the conference in the markets section below. On the domestic data front, the key releases over the past weeks were official manufacturing statistics for November as well as the Absa Purchasing Managers’ Index (PMI) for December. While the November output data came out better than expected, the PMI results were disappointing. In sharp contrast, the global economy ended the year on a high note. The J.P. Morgan global manufacturing PMI came in at a near seven-year high in December. The more recent global real economy data confirmed the robustness reflected in the survey data and will be discussed in the international section below.