Domestic data released last week confirmed that SA GDP most likely contracted in the first quarter, the question is how large the decline will be. The unemployment rate increased in 2019Q1, with notable job losses in the formal sector of the economy, while read more

Domestic data released last week confirmed that SA GDP most likely contracted in the first quarter, the question is how large the decline will be. The unemployment rate increased in 2019Q1, with notable job losses in the formal sector of the economy, while retail, wholesale and motor sales all contracted in the first quarter. Internationally, indications are that economic growth is also slowing down in China, while Germany experienced a slight rebound. The trade dispute between the US and China is partly to blame for China’s woes and given the current tension, could escalate and have more dire consequences. On the political front, populist parties are expected to gain more seats in the EU parliamentary elections this week. Meanwhile, in financial markets, currencies and share prices were also affected by the US-China trade tensions.

The key event over the past week was the national and provincial election on 8 May. The results point to relative stability and are unpacked in the current affairs section below. Generally, the election outcome was welcomed by the markets. However, this more read more

The key event over the past week was the national and provincial election on 8 May. The results point to relative stability and are unpacked in the current affairs section below. Generally, the election outcome was welcomed by the markets. However, this more positive sentiment was to some extent overshadowed by a further escalation of the trade tension between the US and China. As such, in the international section, the focus is on recent trade data from China and the US. The data is against the backdrop of scheduled trade negotiations between the two countries that took place last week. Talks continued despite the US imposing even higher tariffs on Chinese goods from Friday and China stating it would implement the “necessary countermeasures” in return. Finally, domestic activity data for March surprised on the upside, but still suggests that the economy is likely to contract sharply in 2019Q1.

Awaiting Wednesday’s election with bated breath, we briefly unpack the latest poll results and possible implications of the vote outcome in the current affairs section below. On the data front, local vehicle sales and factory activity data showed an read more

Awaiting Wednesday’s election with bated breath, we briefly unpack the latest poll results and possible implications of the vote outcome in the current affairs section below. On the data front, local vehicle sales and factory activity data showed an improvement in April. This is a welcome development as all signs are that the economy will contract quite steeply in the first quarter of 2019. The international section looks at the US nonfarm payroll data, Eurozone growth figures as well as monetary policy decisions in the US and UK.

It was a quiet week on the domestic data front with the main release being the 2019Q1 FNB/BER Consumer Confidence Index. After remaining elevated for most of last year, consumer confidence fell back to its long-term average in 2019Q1. This was underpinned by read more

It was a quiet week on the domestic data front with the main release being the 2019Q1 FNB/BER Consumer Confidence Index. After remaining elevated for most of last year, consumer confidence fell back to its long-term average in 2019Q1. This was underpinned by a change in consumers’ take on the prospects for the South African economy over the next year. Internationally, while US GDP growth for the first quarter of 2019 beat expectations, the German economy continues to cool.

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.