BER Weekly
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.