Last week, Parliament postponed the debate around the Phala Phala report to December 13th, GDP for Q3 ’22 overshot expectations, while internationally, China eased Covid restrictions on travel and production following recent protests and unrest.
International Market Developments
The market awaits the release of CPI data due on the 13 December 2022. Ahead of that, FED officials have maintained their hawkish tone, are expected to hike rates by 50 bps at the final FOMC meeting of the year later this week and have warned that the Fed funds rate could peak at higher-than-expected levels.
The Chinese economy has again been hit by surging Covid cases and the impact of its “zero-COVID” policy. China’s trade balance, at $69.84bn, compressed by more than expected in November due to disruptions from COVID-related lockdowns. In the worst monthly drop since mid-2020, China’s trade balance, at $69.84bn, compressed by more than expected in November, with both imports and exports falling sharply.
Fed economists continue to flag that the chances of a US recession in the next year are at almost 50% given a slowdown in consumer spending, the risk of further global economic setbacks, and further policy tightening.
Local Market Developments
The South African Parliament postponed the debate around the Phala Phala report to 13 December, paving the way for President Ramaphosa to be nominated for a second term as ANC president when the party meets for its 55th National Elective Conference on December 16th.
The governing African National Congress will consider investigations by its ethics body into separate scandals that have embroiled the President and former Health Minister Zweli Mkhize.
The Fitch Ratings Agency noted that impeaching President Cyril Ramaphosa could lead to economic uncertainty.
Local GDP overshot expectations in Q3 ’22, coming in at 1.6% q/q after having contracted by 0.7% q/q in Q2 ‘22. The improvement comes on the back of a sharp increase in activity in the agricultural sector. Eight sectors reported growth in Q3’22 with the agricultural and finance sectors contributing most to the GDP expansion. Transport, manufacturing, trade, construction, and the mining sector also contributed positively.
Eskom Stage 6 Load shedding continues.