We will get to a day where we do not talk about Brexit, the trade war, or Eskom woes but today is not that day. Theresa May’s appeal has been squashed by the House of Commons, trade deal negotiations are largely stagnant, and Eskom has made South African’s realise that we weren’t nearly as pessimistic as we thought we were.
Global News
- Trump has agreed to sign the bipartisan agreement aimed at ending the government shutdown, despite its lack of funding for his wall, agreeing to $1.38 billion rather than $5.7 billion. His press secretary Sarah Saunders said the following, “President Trump will sign the government funding bill, and as he has stated before, he will also take other executive action – including a national emergency – to ensure we stop the national security and humanitarian crisis at the border.”
- Nancy Pelosi has warned that declaring a state of emergency would set a dangerous precedent. She said that it is a wall today, but a Democratic President could invoke the same behaviour on gun control for instance.
- Theresa May’s Brexit deadlock solution has been rejected by the House of Commons, voting 303 to 258. This undermines her pledge to European Union leaders to get her divorce deal approved if they grant her concessions. Follow this link for more information.
- This week the Bank of England Governor, Mark Carney, warned that a “no-deal” Brexit could inflict more damage on the UK economy that the global financial crisis did a decade ago.
- It seems that little progress has been made in the US-Sino trade talks, the discussions ended today with no immediate announcement from either side.
- US national debt has topped $22 trillion for the first time. This is less than a year after it crossed the $21 trillion mark, indicating a further deterioration in the nation’s finances.
Local News
- The rand has been the most volatile currency this week. This volatility is due to the strength of the US dollar as well as local concerns over Eskom and the upcoming budget … but specifically Eskom.
- President Ramaphosa has a plan to unbundle Eskom into three bodies. He hopes that this will reduce the risk represented by a too-big-to-fail institution, lead to better regulatory oversight, and open the path to competition in generation, ensuring future security and diversity of supply. For more information on this follow this link.
- Professor of Economics, Rod Crompton, has written an article on just what has gone wrong at Eskom. Follow this link to go to the article.
- Tito Mboweni is scheduled to deliver the 2019 Budget Speech, on the 20 February. The country is on tenterhooks to find out how he will balance competing for expenditure priorities to stimulate economic growth, in spite of fiscal consolidation measures. Follow this link to an article by PwC on how the 2019 Budget will present South Africa with “a path of hope”.
Source: Dynasty, Stanlib, Prescient, Daily Maverick, Moneyweb, Reuters, RMB, Aljazeera, and Bloomberg Markets, etc
