Economic highlights that affected the local economy last week
Economic Highlights of Last Week
The past week’s six days of stage 4 load shedding and the public holiday
(Human Rights Day on 21 March) were some of the economic highlights that
affected the local economy in the past week.
The past week’s six days of stage 4 load shedding and the public holiday (Human Rights Day on 21 March) were some of the economic highlights that affected the local economy in the past week. Yesterday, Eskom tweeted that “no load shedding [is] anticipated this week as the electricity system [is] gradually improving”.
In the United Kingdom, the Brits are still struggling with Brexit. The European Union agreed late last week to grant the UK a two-week Brexit extension in order to hold a third vote on the withdrawal agreement in the coming week. Should that vote fail, the UK would have to decide urgently on a way forward. Options include 1) a long extension of the Article 50 period, which would require UK participation in European parliamentary elections; 2) a revocation of Article 50, meaning the UK would retain its EU membership; or 3) the UK leaving the EU without a deal. Unemployment in Britain dropped to 3.9% in the three months to January, its lowest level since 1975. Some observers fear that uncertainties surrounding Brexit may be causing UK employers to delay investment, instead hiring workers who they can let go in the face of a disruptive Brexit.
In the United States, members of the Fed’s Federal Open Market Committee (FOMC) released their quarterly summary of economic projections following the past week’s meeting and surprised the market by projecting zero interest rate hikes for 2019.
Back on local soil: Despite Eskom’s Stage 4 load shedding, the rand remained fairly stable and traded even stronger at certain points during the week. The currency then closed the week 0.7% weaker against the USD and remained unchanged against the pound. It would seem that the currency reacted to external factors rather than internal ones.
The JSE all-share index (ALSI) gained 0.23%, with the resources sector gaining 2.37%. Industrials closed 0.78% higher, while financials detracted 3.27%.
International markets closed mixed. The S&P 500 lost 0.77% in value, the FTSE in London lost 0.29% and the DAX closed 2.73% lower. The Asian markets closed stronger, with the Shanghai gaining 2.73% and the Nikkei closing 0.82% up.
The price of Brent crude oil remained stable at around $66.90 per barrel.
With all political parties now firmly in election mode, South Africans
should be cautious as to how they interpret politicians’ rhetoric ahead of 8
May 2019, as politicians are evidently scrambling to woo voters at this late
hour. The economy will for the most part ignore electoral rhetoric and remain
focused on the outcome of the elections.
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