Markets keep eye on international developments for direction

THE past week there were international economic indicators and political news influencing the prospects of the South African economy.

- WALDO KRUGELL

China is a key market for South African exports, and some good news is that the Chinese posted better-than-expected GDP growth for the second quarter. It grew by 2% year-on-year, which is slower than the first quarter's 5.4%, but faster than expected.

US tariffs are still in the news, but South Africa's position remained uncertain with negotiations about the 30% tariff set for August 1 said to be ongoing.

More broadly speaking, macroeconomic news from the US also influences us through the rand-dollar exchange rate and our repo rate decisions. Analysts are waiting to see some of the impact of the increased tariffs on US inflation, economic growth and employment, and are speculating what it would mean for their monetary policy.

In the past week US core CPI came in lower than expected, increasing from 2.4% in May to 2.7% in June. Some categories that are vulnerable to the new tariff regime showed increases, including food and transport.