The global risk-off environment, brought about by fears of a US recession, has further exacerbated South Africa’s economic woes. “When the tide goes out, you tend to see which countries are exposed in terms of weak fundamentals,” says Annabel Bishop, Investec Chief Economist.
In this Investec Focus radio podcast, Investec Chief Economist Annabel Bishop discusses local and international concerns affecting the South African economy.
Annabel Bishop on rand volatility
“Typically, you do see quite a bit of volatility in the domestic currency in the middle two quarters of the year. In the Northern Hemisphere summer period, we tend to see heightened sensitivity to global market events.
“So if you have a risk-off event like the recent escalation of trade war tensions between China and the United States and concerns that the FOMC might not cut interest rates as much as previously was expected – those concerns were exacerbated in terms of the market impact and that’s quite typical for this time of the year. This given that trading conditions are fairly thin as the bulk of market traders in the Northern Hemisphere do tend to go away on their summer vacations now.”
On underlying fundamentals for SA currency and markets remaining weak
“When the tide goes out, you tend to see which countries are really exposed in terms of weak fundamentals and of course with the global financial markets seeing a risk-off period, essentially the tide flowing out, then you see some of South Africa’s worries really being exposed, particularly in the run-up to the medium-term budget policy statement.
“That mini-budget we get, halfway through the fiscal year, gives us an update on government finances and of course the great worry around Eskom and its financing – what’s the quantum of debt that’s going to likely be transferred to the South African government balance sheet?”
On the proposed Debt Relief Law
“The worry [with the new Debt Relief bill] for the banking system is that such write-offs can have a significant impact on the banks’ books themselves. Conversely, this comes at a time where debt forgiveness could see some increase in borrowing.”
On an IMF bailout
“The IMF has said that South Africa is not, at the moment, in a situation which would require IMF rescue, which only happens when you go into a balance of payments crisis, so if we were unable to make payments on our government debt, particularly hard currency and foreign payments. South Africa is not deemed to be in that territory at the moment.”
On Brexit’s impact on SA
“There’s been a lot of increased relationships with South Africa in terms of trade. The UK is looking to foster deeper trade relationships and business ties with SA. If we do see a hard Brexit, strong breakaway from the EU for the UK, it will look to foster trade relationships and deals with other countries.”
On a potential US recession
“We have seen concern that the United States might not cut interest rates by as much as needed in the face of what could be a weakening in US economic growth and global economic slowdown.
“If we do see a situation where it looks like the United States will really go into a recession then I don’t think the Fed would hesitate in terms of cutting interest rates. But at the moment the US economy is deemed to be doing fairly well and I think there’s a friction between what the markets expect and what’s been communicated by the FOMC.”
An interest rate cut from the FOMC?
“Markets are pricing in an 80% chance of a cut in the next meeting which is in September and slightly less than that for October and then perhaps around about 50% in terms of the December cut. Although these probabilities do change quite a bit.” BM
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Two people were killed after a tanker truck overturned on the N11 Groblersdal Road, outside of Middelburg, on Sunday morning.
Shortly before 10.30, paramedics and emergency services personnel arrived on the scene to find that the truck had overturned several times and was lying on the side of the road.
ER24 spokesperson Werner Vermaak said: “Paramedics found that one of the occupants from the truck was ejected during the rollover. Sadly, there was nothing that could be done for him and he was declared dead on the scene. A second occupant was found trapped inside of the cabin. He sustained fatal injuries and was also declared dead on the scene.”
Local authorities attended the scene.
Meanwhile, one person sustained serious injuries and another moderate injuries during a head-on collision between a truck and a bakkie along the Donkerhoek Road in Rustenburg on Saturday night.
At about 20:00, paramedics arrived on the scene where they found the two mangled vehicles.
The driver of the truck sustained serious injuries and was rescued from the vehicle. The driver of the bakkie sustained moderate injuries and was treated on the scene.
Both were taken to a nearby hospital for further medical care, Vermaak said.
England ended Ireland’s Grand Slam hopes in brutal fashion as they rediscovered some of their World Cup form to reignite their own title hopes.
First-half tries from George Ford and Elliot Daly after Irish defensive errors plus two conversions and a penalty from Owen Farrell gave England a commanding 17-0 lead.
Ireland struck back with a try from Robbie Henshaw but with Johnny Sexton uncharacteristically wayward off the tee, they never seriously threatened a comeback.
Luke Cowan-Dickie drove over for England’s third midway through the second half, with replacement Andrew Porter’s late try no sort of consolation for Ireland.
With Wales at home in a fortnight before a trip to Italy, Eddie Jones’ men will believe they can finish the championship in style, although they may need Ireland to do them a favour and beat France in Dublin next month.
For the men in green and their head coach Andy Farrell it was a chastening afternoon, all the optimism created by the wins over Scotland and Wales leaching away in a display that was ponderous until the game was gone.
England capitalise on Irish errors
England began at a real lick, Manu Tuilagi punching holes through the middle and going close down the left before Andrew Conway hauled him down.
And the reward came when Ben Youngs stuck a grubber kick through, Sexton dithered and juggled in his own in-goal area and Ford seized on the loose ball to touch down.
Sexton then mis-kicked horribly with a straightforward penalty from 30 metres out and England set up camp again in the Ireland half.
Jonathan Joseph danced through in midfield after a mis-hit clearing kick from Conor Murray as Maro Itoje and CJ Stander scrapped in the 22, and England’s forwards hammered away at the Ireland line.
With a penalty coming, the men in white shaped to go wide, only for Ford to pop through another kick – and this time it was Jacob Stockdale who dallied, Daly diving onto the ball as Irish hands went to heads.
The scoreboard reflected the gulf between the two sides, England dynamic with ball in hand and ferocious in defence, Ireland laboured and error-ridden.
And Sexton’s miserable half was compounded when he was penalised for slowing the ball up, Farrell stroking over his kick to give England their biggest half-time lead over Ireland in 18 years.
England’s jabs hold Ireland at arm’s length
Ireland simply had to improve – and belatedly they did. An England knock-on from the restart gave away possession and the visitors finally chiselled out some territory too.
England managed to stop an Ireland driving maul from a line-out close in but the pressure kept coming.
Ireland won a penalty in front of the posts, opted for the scrum and eventually found space in the right-hand corner for Henshaw to burrow through two defenders and over the line.
But Sexton shanked the conversion just as he had the first-half penalty and the pressure ebbed away as Eddie Jones threw on Cowan-Dickie, Ellis Genge and Charlie Ewels.
England’s scrum, strong throughout, began to dominate and the penalties started to mount.
Farrell kicked to the corner, the forwards set up the maul from the line-out and Cowan-Dickie peeled off with Sam Underhill and Jonny May driving him on to roll over for England’s third try.
May was nearly clear on his own after seizing a loose ball from a messy Ireland ruck and appeared to be taken out by Henshaw after kicking the ball ahead, only for referee Jaco Peyper to wave play on.
And as the game stumbled towards the line, Porter rumbled over from a metre out for a try that made little difference to Ireland’s afternoon.
Man of the match: Courtney Lawes
A bravura performance in the back row from a man more normally seen in the second row. He made 14 tackles and eight carries in the hour he was on the pitch, setting the tone for a dominant England performance.
Follow ball-by-ball Test Match Special commentary on all games on BBC Radio 5 Live Sports Extra, BBC Sport website and app; in-play highlights (UK only) and live text commentary on BBC Sport website and app.