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The Reserve Bank’s monetary policy committee is expected to keep interest rates stable when they meet this week.
At the previous meeting in March, the Bank also kept rates steady, saying that it had reached the end of its tightening cycle that started at the beginning of 2014. However, concerns remain about the outlook for the currency, which has been impacted by local and international political events. A weakening rand will have an inflationary impact on the local economy.
Market watchers are also keeping a close eye on credit ratings agency Moody’s, which is expected to release its latest review by July at the latest. President Jacob Zuma’s cabinet reshuffle at the end of March prompted both Fitch and Standard & Poor’s to downgrade the country to sub-investment grade, and a downgrade by Moody’s on local currency debt in particular would lead to significant outflows from the bond market, which would hurt the rand.
Other important economic announcements due this week:
Tuesday
- EU: Markit PMI and German IFO Business Climate
- Great Britain: Inflation Hearing
- US: New Home Sales
Wednesday
- EU: German GfK Consumer Confidence
- US: Existing Home Sales
Thursday
- SA: Producer Price Index (PPI)
- Great Britain: GDP 2nd Estimate
- US: Unemployment Change
Friday
- US: Durable Goods Orders
Giacomo Bonavera is head of foreign exchange trading at
Capilis Asset Managers. Click here to visit the firm’s website.
