Today, investors will have plenty of economic data to navigate, both in South Africa and abroad. Locally, March mining production figures are set for release, following a fourth consecutive month of decline in February, when output fell 9.6% year-on-year, down from January’s revised 1.5% y/y contraction. Gold production remains at historic lows, unresponsive to surging global prices. Once the world’s leading gold producer, South Africa now ranks near tenth, hampered by ageing infrastructure, challenging deep deposits, limited investment, and excessive red tape. This persistent downturn reflects broader deindustrialisation, preventing miners from capitalising on elevated commodity prices. Forecasts point to a further 4.6% y/y decline in March, underscoring ongoing sectoral challenges.
Offshore, the Eurozone will publish its second reading of Q1 GDP, while the UK will release preliminary Q1 GDP figures. Economists surveyed by Bloomberg anticipate continued recovery into Q1 2025, driven by manufacturers boosting output ahead of US President Donald Trump’s tariff policies. A recent US-UK trade agreement offers partial relief by suspending some tariffs, but lingering 10% duties and global trade tensions may curb export growth. Persistent business uncertainty could further dampen investment and economic expansion.
Across the Atlantic, a suite of US data will provide fresh perspectives on economic health. The Empire State Manufacturing Index and initial jobless claims will offer early clues on tariff impacts. Meanwhile, April’s retail sales and manufacturing production data may show a slight uptick as households preemptively purchased goods ahead of tariffs, but these figures are likely distorted and not indicative of sustained trends. A clearer picture of tariff effects will emerge from next month’s data. Finally, PPI data will add some colour inflationary dynamics in the US at a time when there is plenty of uncertainty around the impact of President Trump’s tariffs.
ZAR Markets
The rand recovered some ground after volatile intraday trade yesterday, moving back towards its 200-day moving average at 18.2047/$. Its resilience has been tested in recent weeks by a firmer USD as US Treasury yields climb back to pre-Liberation Day levels. The US economy is still holding up well, and its outlook has improved due to the US striking temporary trade deals with major trading partners. All the while, fiscal dynamics in Washington are not improving, adding to topside impetus in US Treasury yields. This may keep the dollar supported for a while longer, and potentially even drive it higher in the coming weeks. The extent to which the rand will be able to withstand the pressure may depend on the budget that the GNU tables later this month and the outcome of talks between President Ramaphosa and Trump next week.
Global FX Markets
The dollar weakened on Thursday amid a U.S.-China tariff truce and speculation that Washington is pushing for a weaker dollar in trade deals, boosting the South Korean won. The won rose 0.8% to 1,396.22 per dollar, following a 0.6% gain, despite being the worst-performing emerging Asian currency last year with a 14% drop. Talks between U.S. and South Korean officials about the dollar/won exchange rate fueled speculation, though Bloomberg downplayed it. Asian currencies may remain supported due to uncertainty over U.S. dollar policy. The dollar slipped against most emerging market currencies, with the Mexican peso near a seven-month high and the yen up 0.3%. The dollar index fell 0.11% to 100.89. Investors are focused on upcoming U.S. retail sales data and trade deal details after a 90-day U.S.-China tariff pause. Analysts predict a 2%-3% dollar index rise soon, with the euro, pound, and yen likely to weaken. U.S. Treasury yields hit a one-month high, driven by concerns over Trump’s budget adding to U.S. debt. The Australian and New Zealand dollars also gained after strong Australian employment data