The rand has weakened sharply this week gaining traction in its depreciation following a credit ratings downgrade from the Moody’s Investor service. The ratings downgrade from Baa1/P-2 to Baa2/P-2 with the credit outlook moving from “stable” to “negative” now aligns itself with current ratings from the Standards & Poors and Fitch’s ratings agencies.
New vehicle sales in South Africa grew 4.9% in October 2014 (y/y) following an increase of 11.5% reported in September 2014.
Manufacturing PMI data was upbeat with a reading of 51.8 in October 2014, alluding to a marginal industry expansion and ahead of the previous months reading of 50.8. The figure was further supported by the HSBC PMI figure of 52.7 which was also a beat on expectation as well as the previous months figure.
The SACCU business confidence index alluded to a decline in business confidence as the index reading dropped from 89.2 in September 2014 to 88.8 in October.t.
In China services PMI data fell short of analyst expectations and the previous months reading of 54, coming in at 53.8. The services industry is now closely monitored by investors as it provides a contribution in the region of 44% (in 2013) to China’s GDP.
European and U.K. the monetary policy meetings yielded little in the way of surprises as the Bank of England and European Central bank kept benchmark lending rates unchanged whilst maintaining current asset purchasing facilities at current levels.
In the U.S. employment data, deemed as the most important economic data point in financial markets, was eagerly awaited by market participants. 214 000 jobs were added to the Non-Farming payroll while the Unemployment Rate improved to 5.8%. The figures were mixed against consensus estimates which predicted 231 000 to have been added with the unemployment rate expected to have remained at 5.9%.