News

05 Jun 2019 More own goals for the rand +

The public spat between the leadership of the ANC regarding the mandate of the SARB is adding additional pressure to the already strained local currency. Both the Finance Minister, and the ANC’s head of economic transformation denied that the mandate of the SARB has been broadened to include quantitative easing measures to drive growth and employment, as previously stated by the party’s secretary-general Ace Magashule.

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04 Jun 2019 Rand slumps in face of worst GDP performance since global financial crisis +

At -3.2%, quarter-on-quarter, seasonally adjusted and annualised, the first quarter GDP figure has come in far worse than the expected -1.6%, with manufacturing being one of the biggest contributors to the drop, falling by 8.8%. This is the biggest decline in GDP since the 2008 financial crises, highlighting the dire state of the South African economy.

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29 May 2019 Rand barely skips a beat as Ramaphosa announces a new cabinet +

President Ramaphosa kicked off his public address by announcing a reduction in cabinet from 36 to 28 portfolios and, while this is a step in the right direction, the cabinet still remains bloated when compared to the cabinet of the late President Nelson Mandela which consisted of 18 cabinet ministries. One of the key changes is the additional responsibility for Employment included in the Labour portfolio, two controversial fields that seem to work against each other rather than in conjunction.

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28 May 2019 Rand slumps 1% on trade fears and cabinet anxiety +

The rand has lost over 1% today as the ongoing trade tensions weigh heavily on sentiment and risk appetite. While President Ramaphosa is likely to name his cabinet later today, the swearing in of David Mabuza as an MP opens the potential for him to become the Deputy President.

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07 May 2019 Rand ignores improved confidence on pre-election nerves +

The SACCI Business Confidence Index increased somewhat to 93.7 in April from the previous 91.8. The rand is unresponsive to the good news, remaining largely flat since markets opened this morning in anticipation of the election take place tomorrow. The ZAR is currently at R14.47/$.

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23 Apr 2019 Rand tumbles as US markets open +

The rand has tumbled as US markets have opened, with the local unit losing close to 0.9% during trade on Tuesday. The rand’s decline can be largely attributed to the bailout of embattled state-owned enterprise Eskom as well as Trump entering into a trade conflict in the European Union, promising retaliation with regards to tariffs.

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17 Apr 2019 Rand steady on benign inflation figures +

Consumer inflation remains well within target range at 4.5% year-on-year for March 2019, undershooting the expected rate marginally. An uptick in inflation since the low of 4% recorded for January 2019 has largely been the result of an increase in fuel prices while May 2019 will see yet another hike.

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10 Apr 2019 Rand breaks below R14.00/$ on good EM backdrop and FOMC anticipation +

The rand has gained about 0.9% against the dollar today, to break below R14.00/$. It has been driven mostly by the positive emerging market backdrop but also in anticipation of the release of the FOMC minutes tonight. There is no interest rate announcement, but the market is expecting the Fed to hold quite a dovish stance. All indications show that there is a slowdown in the American economy and the fear of recession is weighing quite heavily on the Fed at the moment.

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30 Mar 2019 Rand positive on Moody’s news +

On Friday ratings agency Moody's opted to skip the review on SA, leaving the local credit rating unchanged at one notch above junk status. The expectation had been for the agency to adjust the outlook downward, however Moody’s decision not to review means SA is left with a stable outlook.

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28 Mar 2019 Rand stumbles on SARB interest rate announcement +

As expected, the South African Reserve Bank’s Monetary Policy Committee (MPC) announced that interest rates will remain unchanged. The rand is continuing to tread water in the wake of the announcement, as emerging market weakness dominates the field.

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