- Global markets and the euro rose yesterday on the back of some buying after a steep sell-off on fears that Greece’s referendum on its bailout could push the country into default.
- The US dollar is currently trading at 1.37 to the euro, 1.59 to the pound and will buy 78.05 Japanese Yen or 8.05 South African Rand.
- Spot gold is currently trading at US$ 1732.63/oz and platinum at US$ 1593.75/oz. Brent crude oil is currently trading at US$ 108.39 per barrel.
- New vehicle sales moderated in October off September’s high base, with sales of both passenger and commercial vehicles falling over the month.
- However, the annual growth rate remained relatively strong due to base effects.
- The annual growth rate in total vehicle sales will slow in the coming months as the base effect diminishes. Sales of passenger vehicles are expected to soften towards year-end due to due to seasonal factors and a weaker economic environment. Sales of commercials will also remain muted, but rising in line the gradual recovery in fixed investment activity.
- Today’s vehicle sales numbers provide further evidence of the current cautious and selective trend in household demand, which will continue to contain retailers pricing power and pose no threat to the medium-term inflation outlook. With growth vulnerable, the MPC will probably opt to keep rates on hold until there is clear evidence of improved growth momentum.
QUATERLY LABOUR FORCE SURVEY
- The unemployment rate eased slightly to 25 % in the third quarter from 25,7 % in the second quarter, with a total of 193 000 jobs created over the quarter.
- Employment in the formal sector increased by 2,6 % or 238 000 over the quarter, offsetting the 2,4 % or 53 000 drop in informal sector employment.
- The breakdown shows that the largest number of jobs were created in the trade and finance sectors, up by 68 000 and 64 000 respectively over the quarter. In contrast, the transport, utilities and private households sector lost 21 000, 20 000 and 19 000 jobs respectively over the quarter.
- The number of discouraged work seekers declined by 3 000 or 0,1 % over the quarter.
- The unemployment rate is likely to remain high, around the 25 % level in the short term as prevailing poor economic conditions, both locally and globally will discourage companies to expand operations and hire more workers.
- Despite rising inflation, the Reserve Bank will probably remain focused on a faltering global outlook and the vulnerable domestic economy. With growth under threat, the MPC will probably opt to keep rates on hold until there is clear evidence of improved growth momentum. However, should the global economy slip back into recession a cut in rates is likely. For now, we maintain our view of unchanged rates until mid-2012
Daily Financial Markets Report sources information from Business Day, Reuters, JSE Ltd and others.