12 Sep.
Absa: SA Morning Sheet.
This is a daily economic comment …
The sheets can be downloaded daily from Absa Economic Research
An extract fro today’s sheet is provided as an example:
With Q3 business confidence indicating a difficult world out there (sinking to 39 from 48 in Q2), we expect Q3 consumer confidence released at 12pm today to follow, moving below its 11 print in Q2. A bleaker global backdrop has driven many sentiment measures very low and we expect a similar trend in Q3 consumer confidence. In our view, low income consumers are likely fretting over job security as the manufacturing sector continues to decline while the higher end of the income chain is probably feeling cautious. Expenditure-side GDP figures in the SA Reserve Bank’s Q2 Quarterly Bulletin will also be keenly watched. Though we already know that GDP growth slipped to 1.3% q/q saar in Q2 from 4.5% in Q1, this week’s figures will give us a better idea of how household consumption, investment and net trade performed in the quarter. Given the backpedal in most production-side sectors, which we observed in the Q2 GDP figures, we expect some level of slowdown in each of these indicators this week.
On the balance of payments side, we forecast a widening in the Q2 current account deficit to 3.8% of GDP (cf: 3.4%) from Q1’s 3.1%. Though the trade account is expected to remain in surplus territory, we believe it will narrow from the ZAR22.0bn recorded in Q1. Exports continue to dominate the trade environment however; slower global demand is certainly having an impact. The income account is expected to fall further into deficit territory as dividend outflows rose strongly in Q2.
Markets: Another nervous weekend that is likely to lead to a nervous week for markets. It is hard to find anything specific or actionable in the G7 communiqué, so the default must be to expect more of the same. In retrospect, this might have been expected, particularly as the real need for a push on rebalancing the global economy will need to come from the broader G20 rather than the G7. For Greece itself, it is far from clear whether the country’s newly announced tax revenue-raising measures will help it get back ahead of the curve. As of late Friday, the Greece CDS market was pricing in a greater than 90% default probability (depending upon how the calculations are done). …
The sheets can be downloaded daily from Absa Economic Research
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