Weekly market brief - 8 March 2018

Currency Outlook

  • Positive momentum for the rand which has been in place since December last year appears to be fading.
  • The rand has been range trading between R11.72 and R11.95, with investors unsure of where the next clear direction will be. “Once again I suggest that it will be external forces that will be the catalyst for a larger currency move.” (Standard Bank Rand Trader Commentary – 8 Mar 18, Warrick Butler)

Local Data

  • The Standard Bank Whole Economy PMI figure for February rose to 51.4 from 49.0 in January, the first time an expansion has been recorded since mid-2017.
  • GDP in Q4 of 2017 surprised to the upside coming in at 3.1% q/q annualised, and 1.5% y/y, with most expectations around 1.8% and 1.4% respectively.

Interest Rate Outlook

  • Moody’s is scheduled to release their credit rating of South Africa on the 23rd of March. Finance Minister Nhlanhla Nene has said he is confident the country will avoid a downgrade. More political certainty, good growth in Q4 and a budget received well by investors could support this view.
  • It remains likely that rates won’t be changed at this month’s MPC meeting, dependant on the Moody’s decision, with rate cuts possible later on during the year.

International News

  • Last week, President Trump said he would impose a 25% tariff on steel imports and 10% on aluminium, sparking a big sell-off in stocks.
  • The final IHS Markit Eurozone PMI Composite Output Index posted 57.1 in February, down from January’s near 12-year high of 58.8, but well above the series average of 53.0.

Precious Metals

  • Gold prices held steady on Thursday as investors awaited more details on US President Donald Trump's proposed steel and aluminium tariffs, the outcome of the European Central Bank's policy meeting, and US jobs data.
  • Platinum fell to $945.70/oz on Wednesday, its lowest since 4 January, while palladium fell to a one-month low of $961.55/oz.

Base Metals

  • 3m copper fell to $6 956/t on Wednesday on heightened concerns of a trade war that could derail global growth.
  • 3m nickel fell to $13 295/t on Thursday as trade war concerns led to a risk off sentiment.


  • Oil prices rose at the beginning of the week ahead of a meeting between OPEC and US shale firms in Houston at the largest industry energy conference.
  • The EIA reported that US crude inventories rose by 2.4 million barrels to 425.91 million barrels in the week to March 2, less than the 2.7 million barrel increase analysts had forecast.