New Reserve Bank governor Gill Marcus left interest rates unchanged at 7% this week, a move expected by economists. Marcus, who took the reins from Tito Mboweni this month, chaired her first monetary policy meeting. She has adopted the cautionary stance set under Mboweni's tenure, leaving rates steady for the third meeting in a row. The Bank reduced interest rates by 500 basis points between December last year and August to help stimulate the economy.
Gill Marcus
A meeting between the ANC and its allies, Cosatu and the SACP, this month called for the Bank to take a broader monetary policy mandate. This is after it has done little to prevent the rand from strengthening to the point that SA's exports have become uncompetitive. Cosatu and the SACP believe the Bank has not cut rates sufficiently to promote growth.
But Marcus says her appointment is not a political one. "The job that I have is to do the best in terms of what is required for all South Africans in keeping with the mandate and purpose of a central bank," she said after the meeting this week.
Manufacturing output and new car sales figures suggest that the worst of the recession may be over. A recovery is under way, but is expected to be slow.
Razina Munshi
1 143 dollars/ounce. Gold futures on the New York Mercantile Exchange soared to a new high this week, as the dollar slid to a 15-month low. The dollar index, a gauge measuring its value against other major currencies, dropped 0,9% to 74,75.
7 percent. MTN SA will shed 7% of its permanent staff, or 403 workers. The losses affect its human resources, sales, marketing and finance departments. The company's subscriber base dropped from 17,2m to 16,4m between June and September this year.
11,2 percent y/y. European car sales had their biggest gain in over three years in October, led by a recovery in demand in the UK and Spain. UK sales, which were down 12% during 2009, gained 32% in October.
The price of gold has extended its relentless rally, surging to a new intra-day high above US$1 130/oz at the start of this week, as concern over the outlook for the dollar increased gold's appeal as a safe-haven asset. Data from Bloomberg suggests that the gold price and dollar correlation during the past two months was nearly 80%. The dollar plunged to a 15-month low earlier this week after Asian leaders pledged to maintain stimulus measures, boosting demand for riskier assets even further.
Over the past week, the price of Brent crude has continued trading in a tight range of around US$75 -78/bbl. A number of factors are affecting the price, including fluctuations in the dollar and the outlook for the global economy.
Supply and demand fundamentals information from the US has also affected the price. Last week, the US energy department reported a 4% drop in US fuel demand for the week ended November 6. This drop showed a slowing in demand, capping any significant rally in the oil price.
Commodities - Platinum rise |
On Monday, the spot price of platinum jumped above US$1 400/oz (for the first time since August last year) as a weaker dollar and increased investment demand for the metal supported prices. According to data agencies, the Japanese economy expanded 4,8% in Q3 while China's industrial activity jumped 16,1% in October, enhancing demand prospects for the metal.
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