SA: International Reserves, Manufacturing Production, Mining Production, Business Confidence US: ISM Non-Manufacturing Index, Trade Balance, Jobless Claims, Wholesale Inventories Euro zone: Final Composite PMI, Retail Sales, ECB Monthly Bulletin In July, gross reserves are likely to come in at around the USD 47.6bn mark, up from USD 47.0bn in June. The change in the level of reserves will primarily stem from valuation adjustments relating to fluctuations in exchange rates and the gold price. Over the course of July, the gold price rose 10.7% which should translate into an increase in dollar denominated gold reserves of around USD 0.5bn. On the foreign exchange front, the dollar weakened against the euro and remained largely steady against the sterling. The resulting valuation change in foreign exchange reserves should be in the order of USD 0.2bn. Direct accumulation by the SARB will have continued to be limited by the broadly weaker rand. There is scope for manufacturing production to expand in June to 4.9% y/y from a prior 2.2% y/y. Part of the acceleration in annual growth will be a function of base factors as production contracted in June 2012. Aside from statistical considerations, manufacturing production is likely to have maintained an underlying positive growth bias. PMI survey outcomes for June and for July showed improvements in the production sub-index. Production at export-orientated manufacturers will have derived support from the modest improvements in the US and Eurozone economies as well as the weaker rand. Overall, production output in the manufacturing sector should be stronger in Q2.13 compared to Q1.13. In Q1.13, outages were experienced at an ArcelorMittal plant which caused a contraction in output of the basic iron and steel industry. As this industry accounts for nearly a quarter of the manufacturing sector, the effect was significant. These production issues were fully resolved by Q2.13 thereby boosting the performance of headline manufacturing. Consequently, the manufacturing sector’s contribution to Q2.13 GDP is likely to be much larger than in Q1.13 and so Q2.13 GDP holds the potential to surprise to the upside should June’s output number not disappoint.
Posted on: Mon, 05 Aug 2013 16:59:26 +0000
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