BER Weekly
BER Weekly, 17 July 2017
Last updated: Jul 17 2017 12:19PM
On the domestic front, output in both manufacturing and mining output contracted slightly during May. However, the net result for the second quarter could still turn out positive. Regarding South African consumers, confidence levels remained within negative
read moreOn the domestic front, output in both manufacturing and mining output contracted slightly during May. However, the net result for the second quarter could still turn out positive. Regarding South African consumers, confidence levels remained within negative territory during the second quarter. This marked the longest streak where consumer confidence has been at or below zero since the survey started in 1982.
On the international scene, China published upbeat economic growth results for the second quarter, while trade data for June also point towards strong momentum. Meanwhile, retail sales in the US declined for the second consecutive month in June, in conjunction with a slowing inflation rate. Furthermore, testimony by Federal Reserve (Fed) chair Janet Yellen was taken by the markets to have a slight dovish tone. As a result, the dollar weakened, while global stock markets gained significantly.
BER Weekly, 10 July 2017
Last updated: Jul 10 2017 10:29AM
The domestic economic calendar was very light last week, with the only two notable releases early in the week. The news headlines were dominated by the ANC’s National Policy Conference (NPC), which is discussed briefly in the domestic section with the market
read moreThe domestic economic calendar was very light last week, with the only two notable releases early in the week. The news headlines were dominated by the ANC’s National Policy Conference (NPC), which is discussed briefly in the domestic section with the market implications (mainly on the rand) unpacked in the markets section. In the international section, we review the latest jobs data from the US, which came out stronger than expected. However, wage growth remained weak. We also discuss the composite Purchasing Managers’ Index (PMI) figures from the US, Eurozone and China.
BER Weekly, 03 July 2017
Last updated: Jul 3 2017 1:54PM
In the domestic section, we unpack job statistics, trade data and producer price inflation data. The jobs data shows that the economy lost formal sector jobs in Q1, in line with the weak growth performance. On the positive side, the trade data reflected a
read moreIn the domestic section, we unpack job statistics, trade data and producer price inflation data. The jobs data shows that the economy lost formal sector jobs in Q1, in line with the weak growth performance. On the positive side, the trade data reflected a surplus for a fourth straight month.
On the international front, Purchasing Managers’ Index (PMI) data from China points to continued strong growth in the economy.
BER Weekly, 26 June 2017
Last updated: Jun 26 2017 1:08PM
Investor sentiment soured last week following a recommendation by the Public Protector, Busisiwe Mkhwebane, that the mandate of the South African Reserve Bank (SARB) be amended to exclude the clause “to protect the value of the currency”. This saw a sell-off
read moreInvestor sentiment soured last week following a recommendation by the Public Protector, Busisiwe Mkhwebane, that the mandate of the South African Reserve Bank (SARB) be amended to exclude the clause “to protect the value of the currency”. This saw a sell-off in the rand, which was already under pressure following the announcement of the new Mining Charter the week before last. On the global front, economic growth lost some momentum in June. The flash Markit Purchasing Managers Index (PMI) in both the US and the Eurozone (EZ) lost some ground. However, both remained above 50 and merely suggests that the pace of economic growth moderated somewhat. Domestically, the SARB revealed that the current account of the balance of payments widened in 2017Q1, after narrowing sharply during 2016Q4.
BER Weekly, 19 June 2017
Last updated: Jun 19 2017 1:07PM
Besides the reaction to the US Federal Reserve’s (Fed) interest rate decision and commentary, domestic financial markets were dominated by the release of the new Mining Charter on Thursday. Mining shares in particular reacted negatively to the onerous
read moreBesides the reaction to the US Federal Reserve’s (Fed) interest rate decision and commentary, domestic financial markets were dominated by the release of the new Mining Charter on Thursday. Mining shares in particular reacted negatively to the onerous transformation targets contained in the Charter. On the data front, domestic retail trade data for April surprised on the upside. However, annual growth in wholesale trade sales contracted. This, on balance, points to a continuation of the weak consumer demand we saw in 2017Q1. An 11-point fall in the RMB/BER Business Confidence Index in 2017Q2 confirms the more sedate domestic demand conditions. Meanwhile, on the international front, the US Federal Reserve Bank (Fed) lifted interest rates for the 3rd time in 12 months. The main impetus behind the hike was unemployment and inflation which have, in recent times, been close to or at targets levels.
BER Weekly, 12 June 2017
Last updated: Jun 12 2017 4:37PM
Data released by Statistics South Africa (Stats SA) showed that the SA economy entered a technical recession in 2017Q1. We unpack the latest GDP data, together with the first data releases for 2017Q2, in the domestic section. The latest ratings decision by
read moreData released by Statistics South Africa (Stats SA) showed that the SA economy entered a technical recession in 2017Q1. We unpack the latest GDP data, together with the first data releases for 2017Q2, in the domestic section. The latest ratings decision by Moody’s is discussed in the markets section. In the international section we discuss the latest interest rate decision from the European Central Bank (ECB) as well as the purchasing mangers’ index (PMI) and inflation data from China.
BER Weekly, 05 June 2017
Last updated: Jun 5 2017 11:49AM
Statistics South Africa (Stats SA) released the latest Quarterly Labour Force Survey (QLFS) on 1 June and unfortunately it did not make for good reading. While employment picked up in 2017Q1, this was accompanied by a large expansion in the labour force which
read moreStatistics South Africa (Stats SA) released the latest Quarterly Labour Force Survey (QLFS) on 1 June and unfortunately it did not make for good reading. While employment picked up in 2017Q1, this was accompanied by a large expansion in the labour force which pushed the unemployment rate to the highest level since 2003. We discuss the employment situation, together with the latest Absa Purchasing Managers’ Index (PMI) figure and trade data, in the domestic section. In the international section we unpack the latest jobs and inflation data from the US, PMI data from China, and the latest developments in Brazil, which is in the midst of yet another political crisis.
BER Weekly, 29 May 2017
Last updated: May 29 2017 2:03PM
Consumer inflation in the domestic economy slowed notably in April, and as such, moved within the target range of the South African Reserve Bank (SARB). Despite this, the SARB is still cautious regarding currency risks impacting inflation in future, and
read moreConsumer inflation in the domestic economy slowed notably in April, and as such, moved within the target range of the South African Reserve Bank (SARB). Despite this, the SARB is still cautious regarding currency risks impacting inflation in future, and decided to keep the policy interest rate unchanged at its current level of 7%.
On the international scene, the minutes of the latest meeting of the Federal Reserve Open Market Committee (FOMC) shed some further light on the outlook for US monetary policy. In addition, , the May flash Purchasing Managers’ Indices (PMIs) for the US and Eurozone are briefly discussed. Lastly, in global markets, the recent rally in the oil price started to reverse as new rig counts in the US increased to two-year highs. Meanwhile, the rand exchange rate also experienced a short spree of political optimism, only to be disappointed after the weekend.
BER Weekly, 22 May 2017
Last updated: May 22 2017 11:38AM
The domestic section focuses on the trade sector this week. Both real retail and wholesale sales improved on a monthly basis in March. Concerning the first quarter, these improvements were not enough to offset notable contractions in the first two months of
read moreThe domestic section focuses on the trade sector this week. Both real retail and wholesale sales improved on a monthly basis in March. Concerning the first quarter, these improvements were not enough to offset notable contractions in the first two months of 2017.
Internationally, the focus falls on the Eurozone (EZ) where consumer confidence edged up to its highest level in a decade. Then the focus turns to Russia, a BRICS partner of SA. Russia recently emerged from a deep recession induced by lower energy prices. Lastly, the markets section highlights the oil price which increased last week, following talks of Russia’s cooperation with OPEC to extend production cuts.
BER Weekly, 15 May 2017
Last updated: May 15 2017 12:37PM
Last week saw the release of March mining and manufacturing data. With the release of the March data, we have the first full set of real economic data for 2017Q1. In sum, it seems that a technical recession will likely be avoided. In other words, GDP growth
read moreLast week saw the release of March mining and manufacturing data. With the release of the March data, we have the first full set of real economic data for 2017Q1. In sum, it seems that a technical recession will likely be avoided. In other words, GDP growth in 2017Q1 should be positive, mainly due to a sharp recovery in mining production in March and despite the continued weakness in the manufacturing sector. On the international front, the Bank of England (BoE) kept their interest rate unchanged following their meeting last week. More importantly, the BoE made revisions to both the GDP and inflation outlook largely due to the expected impact of Brexit.