We said that last week was politically charged; this week was even more so. On Thursday, President Zuma reshuffled his cabinet without consulting the ANC’s Top 6, in turn causing upheaval on the markets and in the political landscape. S&P has downgraded South Africa’s sovereign credit rating, the rand has tumbled, and the ANC may fracture in the future.
- In the UK, Prime Minister Theresa May triggered Article 50 on March 29 to initiate the country’s departure from the European Union. This did not have too much of an effect on the financial markets as it was already factored in.
- Industrial and Manufacturing Production in the UK fell in January by 0.4% and 0.9%, respectively. Retail performed well gaining 1.3% growth in February, unemployment rates moved from 4.8% to 4.7%, and inflation remained stable at around 2%.
- In Germany, Industrial Production increased 2.8% (after dropping 3% in December 2016) and Retail grew by 1.8% in February 2017.
- In China, President Xi Jinping will soon meet with President Trump to discuss trade tariffs and North Korea.
- Chinese imports leapt by 44.7% in February, and by 28.1% year-to-date.
- S&P officially downgraded South Africa to Junk Status.
- On Thursday, 30 March 2017, President Zuma reshuffled his cabinet removing, among others, Finance Minister Pravin Gordhan and Deputy Minister Mcebisi Jonas.
- On the news of Gordhan’s exit, the rand depreciated by around 8%, from R12.40 to the US dollar on 27 March 2017 to R13.40 on 31 March 2017.
- Despite the rand’s misfortunes, a higher fuel levy, and an increase in the Road Accident Fund, the South African petrol price is still expected to decline by 24 cents per litre in April 2017.
- In 2017, South Africa’s maize crops are an estimated 84% larger than they were last year. This will assist South Africa’s GDP growth in 2017.
- There was a trade surplus of R5.2bn in February 2017, assisted by a decline in imports and an increase in exports. This compares with a trade deficit of -R11.2bn in January 2017. South Africa has recorded a trade surplus in six of the last ten months.