BER Weekly
BER Weekly, 10 December
Last updated: Dec 10 2018 10:56AM
Dominating the domestic headlines last week was the news that South Africa exited a technical recession in 2018Q3. While this was widely expected, the pace of GDP growth surprised on the upside. More on this in the domestic section. After the release of some
read moreDominating the domestic headlines last week was the news that South Africa exited a technical recession in 2018Q3. While this was widely expected, the pace of GDP growth surprised on the upside. More on this in the domestic section. After the release of some survey data for the fourth quarter (see domestic section for details), a spate of actual activity data releases this week will provide further guidance on how GDP growth performed in 2018Q4.
On the international front, US employment data rose by less than expected in November while the international trade balance data for October recorded the biggest deficit in ten years. This, as well as PMI data from China, is discussed here.
BER Weekly, 3 December
Last updated: Dec 3 2018 11:28AM
In the domestic section we unpack the latest BER consumer and business confidence numbers. The latest reading for the Absa Purchasing Managers’ Index (PMI) and producer price inflation figures for October are also discussed. On the international front, PMI
read moreIn the domestic section we unpack the latest BER consumer and business confidence numbers. The latest reading for the Absa Purchasing Managers’ Index (PMI) and producer price inflation figures for October are also discussed. On the international front, PMI data confirms that Chinese growth continues to slow, while comments by US Federal Reserve officials point toward a possibly more dovish interest rate stance for the US central bank.
BER Weekly, 26 November
Last updated: Nov 26 2018 10:04AM
On the domestic front, the main focus was on the South African Reserve Bank’s (SARB) monetary policy decision last week. The SARB decided to hike the interest rate by 25 basis points (bps) after a rigorous debate. The decision mainly hinged on sustained
read moreOn the domestic front, the main focus was on the South African Reserve Bank’s (SARB) monetary policy decision last week. The SARB decided to hike the interest rate by 25 basis points (bps) after a rigorous debate. The decision mainly hinged on sustained higher inflation going forward (with further upside risks) and the bank hoping to prevent more aggressive rate hikes in the future by acting now. On a positive note, the Brent crude oil price continued its steady decline last week, which means local consumers may see some relief on the petrol price front next month – see the markets section.
In the international section, we unpack the latest flash Purchasing Managers’ Index (PMI) figures from the Eurozone and the US. The PMI suggests that growth is continuing to trend lower in the Eurozone, but remains solid in the US. The section also briefly refers to the Brexit deal endorsed by the European Union (EU) over the weekend.
BER Weekly, 19 November
Last updated: Nov 19 2018 11:21AM
In market news, the rand exchange rate took the Constitutional Review Committee’s decision to propose an amendment to Section 25 of the Constitution to allow expropriation without compensation (EWC) in its stride. Globally, the focus was on the chaotic Brexit
read moreIn market news, the rand exchange rate took the Constitutional Review Committee’s decision to propose an amendment to Section 25 of the Constitution to allow expropriation without compensation (EWC) in its stride. Globally, the focus was on the chaotic Brexit negotiations. On the data front, we unpack the latest retail, wholesale and motor trade data in the domestic section. Sales came in stronger than expected across most categories. Combined with an expected improvement in agricultural output and the rebound in manufacturing output, this should help lift the economy out of recession in Q3. In the international section we discuss the latest GDP data out of Germany and Japan, along with inflation data from the US and the UK.
BER Weekly, 12 November
Last updated: Nov 12 2018 9:39AM
In the absence of major market-moving local data releases last week, South African financial market moves were dominated by gyrations on global markets. In the domestic section, we unpack the latest mining and manufacturing output data from Statistics South
read moreIn the absence of major market-moving local data releases last week, South African financial market moves were dominated by gyrations on global markets. In the domestic section, we unpack the latest mining and manufacturing output data from Statistics South Africa (Stats SA). The September prints confirm our view that the economy likely exited the technical recession in Q3, but growth is expected to have remained weak.
On the international front, the focus is on the latest monetary policy decision by the US Federal Reserve (Fed), UK GDP figures as well as the latest international trade data from China. The Chinese trade data reflected strong growth in exports, which is set to slow when additional US trade tariffs likely kick in early next year.
The markets section explains the drivers of the see-sawing rand exchange rate, which managed to dip below R14/$ mid-week, but weakened again at the end of the week.
BER Weekly, 5 November
Last updated: Nov 5 2018 10:33AM
Various domestic economic indicators were published last week - mostly reflecting tough conditions. On the negative side, the unemployment rate increased, the trade balance swung into a deficit and the Absa PMI declined. An increase in the sale of commercial
read moreVarious domestic economic indicators were published last week - mostly reflecting tough conditions. On the negative side, the unemployment rate increased, the trade balance swung into a deficit and the Absa PMI declined. An increase in the sale of commercial vehicles was the exception on the positive side.
Internationally, preliminary indications are that the Eurozone economy continued to lose momentum in the third quarter. Meanwhile, policy makers at the central banks of Japan and the UK made no changes to their key interest rates. Lastly, in the US, nonfarm payroll data signalled a healthy labour market with rising wages, enforcing expectations for another Federal Reserve Bank (Fed) policy rate hike in December. In financial markets, the domestic equity market tracked global bourses higher to recover strongly from recent losses.
BER Weekly, 29 October
Last updated: Oct 29 2018 12:11PM
As cautioned in the previous edition of the Weekly, the rand exchange rate and government bond yields were under pressure towards the end of last week (see markets section). This was after Finance Minister Tito Mboweni tabled his maiden Medium Term Budget
read moreAs cautioned in the previous edition of the Weekly, the rand exchange rate and government bond yields were under pressure towards the end of last week (see markets section). This was after Finance Minister Tito Mboweni tabled his maiden Medium Term Budget Policy Statement (MTBPS) in parliament. The headline fiscal ratios showed a notable deterioration compared to the February Budget, which was negative for domestic financial markets. On a positive note, the minister’s speech candidly stipulated the steps SA needs to take in order to overcome some significant challenges. Clients can read more in our comment. Besides the MTBPS, Stats SA released the consumer and producer inflation numbers for September; read more below.
Internationally, flash Purchasing Managers’ Indices (PMI) from the US and the Eurozone were published for October by Markit. These indicate that growth in the US economy is still vibrant, while the Eurozone continues to lose momentum. However, the European Central Bank (ECB) remains optimistic about the region and expects to start tightening monetary policy next year.
BER Weekly, 22 October 2018
Last updated: Oct 22 2018 11:02AM
Domestic data last week was a mixed bag. While retail and wholesale trade data for August was reasonably upbeat, mining production continued to underwhelm. On the international front, the minutes of the September Federal Open Market Committee (FOMC) revealed
read moreDomestic data last week was a mixed bag. While retail and wholesale trade data for August was reasonably upbeat, mining production continued to underwhelm. On the international front, the minutes of the September Federal Open Market Committee (FOMC) revealed a somewhat more hawkish view on the future path of the policy interest rate while at the same time highlighting downside risks to growth. This week, the domestic focus will be squarely on the Medium Term Budget Policy Statement (MTBPS). Clients can expect a comprehensive overview after the event.
BER Weekly, 15 October
Last updated: Oct 15 2018 11:47AM
Domestic headlines last week were focused on the resignation of Nhlanhla Nene as finance minister and the appointment of former Reserve Bank governor Tito Mboweni as his replacement. Along with the gyrations of the US dollar, much of the local currency’s
read moreDomestic headlines last week were focused on the resignation of Nhlanhla Nene as finance minister and the appointment of former Reserve Bank governor Tito Mboweni as his replacement. Along with the gyrations of the US dollar, much of the local currency’s fluctuations were tied to these developments, especially with the Medium Term Budget Policy Statement (MTBPS) looming . Meanwhile, on the global data front, inflation pressure eased in the US in September. Both producer and consumer inflation recorded slower growth on an annual basis.
BER Weekly, 8 October
Last updated: Oct 8 2018 11:16AM
In a quiet week on the domestic data front, local financial markets took direction from US dollar strength and higher US bond yields. In the domestic section, we unpack the latest vehicle sales data. We also discuss the BER’s revised forecast for real GDP
read moreIn a quiet week on the domestic data front, local financial markets took direction from US dollar strength and higher US bond yields. In the domestic section, we unpack the latest vehicle sales data. We also discuss the BER’s revised forecast for real GDP growth for the period 2018 to 2020. The combination of weak GDP prints in 2018H1 and several other adverse developments have necessitated a significant downward revision to our outlook for 2018/19. In the international section we discuss the latest non-farm payroll report out of the US, which points to continued improvements in the labour market. We also look at the latest reading for the JP Morgan Global Manufacturing Purchasing Managers’ Index (PMI) for a clue regarding the stance of the global economy.