07 Nov.
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:
In a relatively busy week, all eyes are likely to be on the SA Reserve Bank’s MPC meeting and interest rate decision on Thursday. Though we do not expect a downgrade to the SARB’s growth forecasts since its last MPC meeting, we would expect the MPC to continue to voice its concerns surrounding the developments in Europe. We believe there is a risk that the SARB lifts its inflation forecasts, given the weakness in the currency over the past few months and the little commodity price respite. Given all of the above, we view the chance of a rate cut as unlikely in the current environment. We therefore look for the MPC to keep the policy rate on hold this week at 5.5%.
This morning sees the release of the SARB’s gross gold and foreign exchange reserve position for October. Revaluation adjustments through a higher USD gold price and weaker USD against the majors are likely to have pushed gross reserves around USD700mn higher, to USD50.4bn. The release of manufacturing production numbers for September on Wednesday also warrants a fair amount of attention. We expect production growth to have improved to 6.7% y/y in September from 5.6% the prior month. Base effects from industrial action in some of SA’s manufacturing sub-sectors in September last year are likely to have helped push headline production growth higher. On a seasonally adjusted m/m basis we look for a more modest 0.7% rise after August’s strong 7.6% bounce. Perhaps even more important than this week’s headline manufacturing number is what manufacturing momentum managed to register in Q3. On a 3m/3m seasonally adjusted and annualised growth basis, production was down 7.7% as of August. Unfortunately, even if our 0.7% m/m expected growth forecast for September comes to fruition, this is unlikely to push this number into positive territory and therefore the sector looks set for another quarter of negative growth. …
The sheets can be downloaded daily from Absa Economic Research
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