Domestic numbers

The rand was weaker due to the weaker gold price and a strong US dollar, which remained firm on the back of expectations of higher interest rates in the US later in the year due inflationary concerns.

The rand closed softer against the US dollar at R6,20 on Thursday compared with R6,08 in the previous week, but remained little changed against both the British pound and the euro at R11,65 and R8,10 respectively.

Bond yields surged higher due to growing expectations that interest rates will remain at current levels, with the yields on the R153 2010 and the R194 2008 closing at 8,18% and 7,92% respectively on Thursday compared with 8,00% and 7,75% in the previous week.

Major economic releases due this week include the consumer inflation data for February as well as the Reserve Bank’s Quarterly Bulletin on Wednesday.

Producer inflation, the trade balance for February and money supply and private sector credit extension statistics for February are all due on Thursday.

The Economic Unit expects consumer inflation to ease to 2,7%y-o-y (up 0,3%m-o-m) from 3,0%y-o-y and CPIX is expected to fall to 3,3%y-o-y (up 0,3%m-o-m) from 3,6% y-o-y in January.

Producer inflation is expected to fall to 1,3%y-o-y (up 0,3%m-o-m) from 1,4%y-o-y in the previous month. Money supply is expected to ease to 11,5%y-o-y (up 2,0% m-o-m) from 11,98%y-o-y in January.

Private sector credit extension is expected to increase to 16,0%y-o-y (up 0,3%m-o-m) from 15,22%y-o-y in January. The trade deficit is expected to narrow to R1,2billion from a R3,36billion deficit in January.