Standard Bank PMI
Standard Bank PMI
The headline PMI, which is an indicator of changes in private sector business conditions, dipped from 51.1 the previous month to 50.4 in April 2018.
In the past week, international events would seem to have little effect on the markets. The only substantial local data was the Standard Bank PMI (purchasing managers’ index) released on Friday. The headline PMI, which is an indicator of changes in private sector business conditions, dipped from 51.1 the previous month to 50.4 in April 2018.
Internationally, the Federal Open Market Committee (FOMC) left interest rates unchanged at its meeting during the week, but said nothing to indicate to investors that a quarter-point rate hike should not be expected by the June meeting. The Fed acknowledged that inflation had moved closer to its 2% target. Market observers are still speculating whether more Fed fund rate increases are coming, but the FOMC is split between two and three additional rate hikes in 2018.
The US unemployment figure fell to 3.9% in April from 4.1% in March, the lowest since December 2000.
While core inflation rose to within 0.1% of the Fed’s 2% target, in Europe, inflation moved further below the European Central Bank’s 2% goal, falling to a preliminary 1.2% in April. While the ECB’s is still expected to wrap up its asset purchase programme by the end of this year, below-target inflation readings will likely push rate hikes further into the future.
Global equity markets were not affected by the above news, and closed only marginally higher, with the exception of the German DAX, which closed 1.87% higher.
The local market gained 0.38%, with a strong push from the resources sector that gained 1.62% for the week. It should be mentioned that returns came with a considerable amount of volatility, which seems to be a theme for 2018.
Brent crude oil traded at approximately $74.95 per barrel.
The rand traded at around R12.49 against the USD. The higher oil price and weaker rand could put further pressure on fuel prices in the not too distant future.
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