Nedbank Weekly Economic Monitor

29 Aug.

Nedbank Weekly Economic Monitor: Review of 22 to 26 August and preview of 29 August to 2 September 2011.

• Global equity markets recovered slightly last week, following four weeks of losses, as investors re-entered the market in search of bargains.
• The rand rebounded at the end of the week, mainly helped by a firmer euro.
• Consumer inflation rose to 5,3 %y-o-y in July from 5 % in June, driven mainly by high food and fuel prices as well as increases in administered prices.
• Producer inflation also gained further momentum in July, rising to 8,9 %y-o-y from 7,4 % in June, largely due to higher electricity prices as well as an increase in the cost of gas and water.

IRB Rugby World Cup Guide 2011, by Chris Hawkes

An IRB Rugby World Cup 2011 guide that provides background information about the host nation, New Zealand, key details of the venues along with tourist highlights. It includes a Tournament fill-in chart, to keep fans in-tune and involved with the matches. It contains details about the teams participating in the World Cup.

Domestic

After being pressured by continued risk aversion earlier in the week, the rand rebounded on Friday, helped by a resurgence in the euro and firmer precious metal prices. The unit closed at R7,13, R10,20 and R11,69 against the US dollar, the euro and the British pound respectively, strengthening from R7,18, R10,34 and R11,83 a week earlier.

Bond yields were mixed, with yields on the benchmark R157 2015 and R186 2025 falling further during the week, and ending at 6,59% and 7,97% respectively on Friday from 6,63% and 7,89%, but the 3- and 10-year BESA actuaries rising modestly to 6,26% and 7,77% from 6,21% and 7,77% while the 5-year BESA actuaries were almost unchanged at 6,96% from 6,97%.

Money market rates declined, with the 3-, 6-, 9- and 12-month JIBAR ending at 5,50%, 5,62%, 5,76% and 5,88% respectively from 5,51%, 5,74%, 5,90% and 6,01%.

Local equities increased slightly over the week, along with higher global markets. The FTSEJSE all share index gained 0,2% to end at 29 425,1, with industrials and basic materials up by 0,4% and 0,2% respectively to close at 31 198,6 and 26 622,8, while financials ended only 0,02% higher at 20 538,9.

Consumer inflation rose further in July, increasing to 5,3% y-o-y from 5% in June, slightly ahead of market expectations of 5,2%. Inflation continues to be driven by high food and fuel prices as well as increases in administered prices. Over the month, prices rose by 0,9%, up from 0,4% in the previous month. The main contributors to the monthly increases were higher electricity tariffs (up by 16% m-o-m) as well as water and other services (up by 8,7% m-o-m). Miscellaneous goods and services, a category which includes insurance and financial services, rose by 0,5% m-o-m. Car prices as well as public transport costs also rose over the month. In contrast, petrol prices fell by 3,2% m-o-m. Food inflation picked up slightly to 7,5% y-o-y, up from 7,3%. Higher food prices continue to be driven by rising prices for breads and cereals, meat as well as oils and fat. Inflation in the hotel and restaurant category also picked up, increasing to 5,4% y-o-y from 1,1% y-o-y. The miscellaneous goods and services category as well as household goods and appliances also experienced modest gains in inflation. …

See the full monitor at Weekly Economic Monitor