|
at a glance In seeking guidance on monetary policy action, both the SARB and market participants analyse economic data releases to provide some insight into the future direction of monetary policy. This week saw the release of two key local economic data releases, namely inflation and economic growth. Many now believe that the case for an interest rate cut at the next MPC meeting has been strengthened as inflation is lower and economic growth is beginning to moderate. At the time of writing, markets had all but priced in a further 50bps cut, which would take the prime interest rate to its lowest level since 1980. While having a lower interest rate may be beneficial to many indebted South Africans, it does, however, mean that a lower return would be achieved on cash and money market investments. With cash yields being at low levels, investors with higher return objectives need to have exposure to higher-yielding asset classes. By remaining fully invested in a diversified portfolio, investors would be better equipped to achieve the higher risk-adjusted returns that they require. | ||||||||
|
past week in summary | ||||||||
|
equity markets |
27-Aug-10 |
weekly change |
|
bond markets |
27-Aug-10 |
weekly change | ||
|
South Africa |
|
|
|
South Africa |
|
| ||
|
ALSI |
26738.91 |
-0.9% |
|
R204 yield |
7.78 |
-0.07 | ||
|
United States |
|
|
|
United States |
|
| ||
|
S&P 500 |
1064.59 |
-0.7% |
|
US 10-year bond yield |
2.65 |
0.04 | ||
|
Dow Jones |
10150.65 |
-0.6% |
|
United Kingdom |
|
| ||
|
NASDAQ |
2153.63 |
-1.2% |
|
UK 10-year bond yield |
2.90 |
-0.08 | ||
|
United Kingdom |
|
|
|
Europe |
|
| ||
|
FTSE 100 |
5201.56 |
0.1% |
|
French 10-year bond yield |
2.56 |
-0.04 | ||
|
Europe |
|
|
|
German 10-year bond yield |
2.21 |
-0.06 | ||
|
CAC 40 |
3426.14 |
-2.8% |
|
Asia |
|
| ||
|
DAX |
5951.17 |
-0.9% |
|
Japanese 10-year bond yield |
1.01 |
0.07 | ||
|
Asia |
|
|
|
currency markets |
|
| ||
|
Nikkei 225 |
8991.06 |
-2.1% |
|
ZAR / USD |
7.2955 |
0.1% | ||
|
Hang Seng |
20597.35 |
-1.8% |
|
ZAR / GBP |
11.3106 |
0.3% | ||
|
gold |
|
|
|
ZAR / EUR |
9.2967 |
-0.1% | ||
|
London PM close (USD) |
1235.00 |
0.9% |
|
|
|
| ||
|
highlights of the week ahead | ||||||||
|
international |
Monday |
US: personal income (Jul) | ||||||
|
|
Tuesday |
eurozone: unemployment rate (Aug) | ||||||
|
|
US: consumer confidence (Aug) | |||||||
|
|
US: FOMC minutes | |||||||
|
|
Wednesday |
eurozone: PMI (Aug) | ||||||
|
|
US: ISM manufacturing (Aug) | |||||||
|
|
US: vehicle sales (Aug) | |||||||
|
|
Thursday |
eurozone: GDP prelim (2Q) | ||||||
|
|
ECB rate decision | |||||||
|
|
Friday |
US: employment report (Aug) | ||||||
|
|
|
| ||||||
|
South Africa |
Tuesday |
PSCE, money supply (Jul) | ||||||
|
|
|
trade balance (Jul) | ||||||
|
|
Wednesday |
Kagiso PMI (Aug) | ||||||
|
|
Thursday |
vehicle sales (Aug) | ||||||