Market Commentary | The week that was
On Thursday 24 March, the South African Reserve Bank’s (SARB) Monetary Policy Committee (MPC) announced an interest rate increase of 25 basis points to 4.25%. According to the SARB Governor, Lesetja Kganyago, three members of the Monetary Policy Committee (MPC) preferred the announced increase of 25 basis points, while two members suggested a 50-basis point increase in the repo rate. The announced increase was in line with market expectations and was introduced on the back of higher inflation - both locally and globally.
Inflation continues to surprise market participants on the upside, while the war in the Ukraine and added economic sanctions against Russia are adding pressure on global prices.
In China, the city of Shanghai will be locked down in a renewed battle against the latest outbreak of Covid-19. On Saturday, Shanghai recorded its highest daily number of new cases since the early days of the pandemic. However, case numbers are not high by some international standards.
Looking at the week ahead; On Friday the global credit rating service, Moody’s, will publish its latest review of SA’s sovereign credit rating; and in the US, key data releases of the US GDP and Non-Farm Payrolls (both of which are expected to be positive) will be published.