BER Weekly
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.