The week ahead


The week ahead


Published Date: 2018-04-04 | Source: INCE|Community | Author: Chris Gilmour

The week ahead

Although the prospect of an all-out trade war between the US and China abated somewhat last week, continued nervousness and thus heightened volatility is expected on this front for the foreseeable future. Nevertheless, unless inflation and interest rates soar unexpectedly and a genuine trade war does indeed break out, global equity markets should stay relatively elevated, albeit with significantly elevated levels of volatility.

As expected, the SARB's MPC cut interest rates by a modest 25bp. This will help in a very limited sense to offset the impact of the one percentage point increase in VAT that came into effect on 1 Apr as well as the significant hike in the fuel price as a result of the fuel levy in the February Budget. The MPC was split 4:3 in favour of a cut, perhaps suggesting that further cuts this year may be difficult to achieve.

The new vehicle sales figure for Mar released next week should give a further indication of the strength or otherwise of the consumer economy in SA.

The Indian government gave further insight last week into its plans to privatise its debt-laden national carrier, Air India. Foreign owners will only be able to own up to a maximum of 49% of the airline initially but over time that may well change. Now, if only the South African government would take a leaf out of India's book.

Data Releases this week;

  • Tue 3 Apr
    • NAAMSA new vehicle sales Mar
    • Absa Manufacturing PMI
  • Thu 5 Apr
    • Standard Bank PMI Mar
  • Fri 6 Apr
    • US Nonfarm Payrolls Mar (Consensus 189k)

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