The G-20 Summit is underway. Although there has been a lot of commotion around the summit, it has not been about the summit itself but rather about President Trump, his threats, and the trade wars he is broaching around the world. President Trump said that if the US and China do not make significant progress on a trade deal during the G-20 summit, he would introduce more tariffs on Chinese goods.
- The G-20 summit has started in Osaka, Japan. Japanese Prime Minister Shinzo Abe said that he urges attending countries to have a strong message to support “free, fair and indiscriminate” trade as he expressed “deep concerns” over the current landscape of global trade.
- This could be interpreted as a jab to the US and China who have created speculation around the G-20 summit about their own periphery trade talk meetings. President Trump has said that if no progress is made on the trade deal with China at the G-20 summit, he would place substantial additional US tariffs on Chinese goods.
- President Trump has met with the leaders of Japan, Germany and India and has said that he is interested in creating trade deals with all three countries.
- The Fed did not yield to President Trump’s whining this week and insisted on its independence by not committing to an interest rate cut of half a percentage point as soon as its next meeting.
- On the 17th July 2019, former Special Counsel Robert Mueller will testify publicly before the House Judiciary and Intelligence Committees about his investigation into President Trump.
- Reuters reported this week that the Chinese government was complicit in hacking major tech service providers, including Hewlett Packard, IBM, Fujitsu, Tata, NTT, Dimension Data, Computer Sciences Corporation, and DXC Technology. The Reuters report said that this was a year’s-long corporate espionage campaign to steal trade secrets.
- Global markets were slightly off this week as they consolidated after a very positive recovery in the first three weeks of the month. At the time of writing global equity markets are still up 3.5% or more for June 2019.
- President Cyril Ramaphosa has said that State Owned Enterprises (SOEs) have a critical role to play alongside the private sector to drive economic growth. He said, “As we address challenges at specific SOEs, we are also working towards a new SOE landscape in which state-owned companies have the expertise, leadership and appropriate financial models to fulfil their respective mandates.”
- In its annual report, the South African Reserve Bank said that it would maintain its current monetary policy as it remains broadly accommodative and tolerating higher inflation will do little to boost economic prospects in the long term
- Pravin Gordhan announced this week that Eskom has begun to develop its plan to implement its separation into three separate business entities: generation, transmission, and distribution. These will be wholly owned by the state.
- Moody’s has warned that rising income inequality in South Africa could diminish economic growth opportunities and in effect impact Moody’s investment grade credit rating negatively.
- Jacob Zuma will be attending the State Capture Commission for five days in July. Zuma’s legal team has complained that Zuma has not been given the questions he will be faced with beforehand. If the ex-president does pitch up, it will be fascinating to hear what he has to say.
- Delivering the keynote address at Daily Maverick’s Business Against Corruption, Shamila Batohi, the Head of the National Prosecuting Authority, asked South Africans to be patient when expecting action to be taken against the perpetrators of State Capture, saying that she had inherited a “house on fire.”
- At the time of writing the rand is 1.3% stronger over the week, on the back of the US dollar weakness. The rand’s strength, as well as the slightly softer global markets, resulted in the ALSI falling by 1.2% over the week. The ALSI remains up 4.6% for the month despite the rand having gained 3% over this period.
Source: Dynasty, Daily Maverick, Moneyweb, Reuters, RMB, Aljazeera, and Bloomberg Markets, etc