Despite the shorter week, there was still some domestic data to digest, namely consumer inflation and retail sales. While inflation moved in line with the consensus predictions (albeit lower than our expectation), the outcome for retail sales beat read more

Despite the shorter week, there was still some domestic data to digest, namely consumer inflation and retail sales. While inflation moved in line with the consensus predictions (albeit lower than our expectation), the outcome for retail sales beat expectations. Nonetheless, growth in retail sales remains weak and although the March data is still outstanding, the broader internal trade category will likely be a drag on 2019Q1 GDP. On the international front, the latest US trade performance and Chinese data (including 2019Q1 GDP growth) largely fared better than expected.

On the domestic front, incoming data for 2019Q1 continues to disappoint. The latest mining and manufacturing output data suggest that GDP growth could slow notably in Q1, with a contraction looking increasingly likely. The rand ignored the raft of read more

On the domestic front, incoming data for 2019Q1 continues to disappoint. The latest mining and manufacturing output data suggest that GDP growth could slow notably in Q1, with a contraction looking increasingly likely. The rand ignored the raft of disappointing domestic data, strengthening to below R14/$ - more on this in the Markets section. In international news, the European Central Bank (ECB) stuck with its current accommodative monetary policy stance, suggesting that further stimulus might be on the cards should growth remain subdued. We also unpack inflation data from the US and China, as well as the latest Chinese trade statistics.

Last week, financial markets continued to digest the ratings reprieve offered by Moody’s, with the rand ending up a clear winner – the domestic unit strengthened by almost 3% against most major currencies. Domestic data releases, however, suggest that real read more

Last week, financial markets continued to digest the ratings reprieve offered by Moody’s, with the rand ending up a clear winner – the domestic unit strengthened by almost 3% against most major currencies. Domestic data releases, however, suggest that real economic activity remains in the doldrums, with new passenger car sales and the Absa Purchasing Managers’ Index (PMI) painting a gloomy picture. On the international front, the latest data shows that the US economy continues to chug along at a healthy pace. In contrast, growth appears to be slowing in the UK and the Eurozone (EZ). This week, all eyes will once again be on the ongoing Brexit negotiations. It remains to be seen whether UK lawmakers can agree on a Brexit deal before the current departure date, set for 12 April.

Against the general expectation, but as was the case in late 2018, Moody’s credit agency again decided to skip (as they are entitled to do) a scheduled pronouncement on SA’s sovereign credit rating on Friday. This implies that the rating remains at one notch read more

Against the general expectation, but as was the case in late 2018, Moody’s credit agency again decided to skip (as they are entitled to do) a scheduled pronouncement on SA’s sovereign credit rating on Friday. This implies that the rating remains at one notch above sub-investment grade, with a stable outlook. Domestic financial markets responded positively to the news this morning (see markets section). Although Moody’s reprieve is cause for relief, the current environment of weak SA real GDP growth and numerous fiscal risks (illustrated again last week by Sanral’s decision to ‘temporary’ suspend e-toll summonses) suggest that the risk of a rating outlook change and ultimately a credit downgrade will remain in the foreseeable future. Before the Moody’s decision, the Monetary Policy Committee (MPC) decided to keep the repo rate unchanged. Other domestic news included an acceleration in producer inflation, an improvement in employment numbers and a modest trade surplus in February. Internationally, the US reported a smaller trade deficit in January, while trade negotiations with China resumed last Thursday. In China, purchasing managers’ indices (PMIs) ticked up above the neutral-50 mark, while in Britain no progress has been made on the way forward regarding Brexit.

Last week, financial markets were surprised by a more dovish-than-expected monetary policy statement from the Federal Reserve (Fed) in the US. In response, a section of the US yield curve inverted. As expected, the Bank of England (BoE) also held its policy read more

Last week, financial markets were surprised by a more dovish-than-expected monetary policy statement from the Federal Reserve (Fed) in the US. In response, a section of the US yield curve inverted. As expected, the Bank of England (BoE) also held its policy rate unchanged. Besides monetary policy, flash PMI data from key economies continue to point towards a slowdown in global growth. Domestically, the consumer and trade sector came into focus. In February, headline consumer inflation remained safely below the 4.5% midpoint of the target range. In the trade sector, real retail and wholesale sales improved marginally in January. However, nominal sales were not much higher, an indication that trade inflation was running below headline consumer inflation at the start of this year. In the week ahead, news will be dominated by Moody’s judgement of the SA economy on Friday. Read more in the current affairs section.

Domestic economic data released last week indicates that growth momentum remained poor at the start of the year. In the domestic section, we discuss the latest reading for the RMB/BER Business Confidence Index (BCI), along with mining and manufacturing output read more

Domestic economic data released last week indicates that growth momentum remained poor at the start of the year. In the domestic section, we discuss the latest reading for the RMB/BER Business Confidence Index (BCI), along with mining and manufacturing output for January. On the international front, we briefly discuss the latest Brexit developments, as well as activity data out of China and inflation figures from the US.

Last week, domestic growth and current account data for 2018Q4 came out better than expected. Despite this, the rand exchange rate was under pressure amid a stronger US dollar and market concerns after President Ramaphosa reiterated in Parliament that the SA read more

Last week, domestic growth and current account data for 2018Q4 came out better than expected. Despite this, the rand exchange rate was under pressure amid a stronger US dollar and market concerns after President Ramaphosa reiterated in Parliament that the SA Reserve Bank (SARB) will be nationalised. The economy expanded by 1.4% q-o-q (seasonally adjusted and annualised, saar) in Q4, bringing full year growth to 0.8% in 2018. The current account deficit narrowed in Q4, but still widened for the full year. In the international section, we unpack the latest trade data from China, a monetary policy announcement from Europe as well as employment figures from the US.

Global stock markets were boosted early last week by the news that US President Trump granted China another reprieve on possible further import tariff hikes. At the start of this week, further optimism on this front continued to boost markets. On the domestic read more

Global stock markets were boosted early last week by the news that US President Trump granted China another reprieve on possible further import tariff hikes. At the start of this week, further optimism on this front continued to boost markets. On the domestic data front, after recording a solid surplus in December, SA’s trade balance moved back into deficit territory in January on the back of a decline in exports. However, vehicle export data suggests that the trade balance may improve in February. In international news, 2018Q4 US GDP growth was better than expected, supported by still robust consumer and business spending. In all, 2018 marked the fastest growth since 2015. In contrast, the latest PMI data for China points to a continued slowdown in the world’s second biggest economy.

Domestically, attention was focused on the Budget, in particular the extent to which government would provide financial assistance to Eskom. In the end, the Treasury managed to limit the fiscal slippage of an Eskom cash injection through non-Eskom expenditure read more

Domestically, attention was focused on the Budget, in particular the extent to which government would provide financial assistance to Eskom. In the end, the Treasury managed to limit the fiscal slippage of an Eskom cash injection through non-Eskom expenditure cuts and R15bn worth of tax hikes. In other domestic news, consumer inflation for January surprised on the downside, rising by the slowest pace in almost a year. Internationally, the slowdown in the manufacturing sector continued into February in most major economies. This is according to the latest flash PMI data, and reaffirms the view that global growth is coming under increased strain.

There was a slew of data releases last week, both on the domestic and international front. Domestic releases focused on real economic data for December 2018, all but completing the picture for 2018Q4 GDP. In financial markets, the rand lost further ground read more

There was a slew of data releases last week, both on the domestic and international front. Domestic releases focused on real economic data for December 2018, all but completing the picture for 2018Q4 GDP. In financial markets, the rand lost further ground last week on the back of a strong US dollar and the return of load shedding. On the international front, we turn to inflation figures from around the globe as well as trade data out of China.