Last week, markets awaited revisions to US inflation data, while the post SONA address has left markets with more questions than answers as the country’s power and logistics issues continue.
International Market Developments
Annual revisions to the US inflation data did not change the disinflation narrative for 2023. US inflation was about the same at the end of last year as initially reported after incorporating annual revisions. Core inflation stood at 3.3% annualised in the final quarter of 2023, matching the previous reading, while revisions to the headline figure were also minimal, though December’s monthly increase was marked lower to a 0.2% advance instead of 0.3%.
US Fed Chair Jerome Powell commented that the Fed is wary of cutting interest rates too soon, thus consumers might have to wait until after March before seeing interest rate relief. Policymakers are likely to look for more evidence that inflation is coming down on a sustainable basis before cutting rates.
The US CPI for January is in the spotlight this week and is expected to have eased to 2.9% y/y in January, from 3.4% y/y in December. Core CPI is likely to come in at 3.7% y/y in January, from 3.9% y/y in December.
Local Market Developments
Last week, the South African President delivered a speech for the State of Nation Address (SONA) which many felt didn’t adequately address core and critical challenges to the SA economy. Conspicuously absent in the speech was the date for the upcoming elections.
Meanwhile, the country’s economic output continues to be under pressure due to load shedding whilst the logistics and rail crisis continues to worsen as shipping disruptions lead to a decline in sales.