Market Commentary | The week that was
United States Sovereign Debt Rating Downgraded: This week, Fitch, the global rating agency, made a significant adjustment to its assessment of the US government's creditworthiness. They downgraded US Treasury securities from their highest AAA rating to a slightly lower AA+ designation. This change could have substantial and lasting implications for the United States and the global economy. US Treasury debt has traditionally served as a benchmark for interest rates worldwide and is considered one of the safest investments with interest returns. The downgrade may impact the perception of the US as a secure borrower, potentially leading to changes in interest rates and investor confidence in the US economy.
Cape Town in Turmoil due to taxi strike: Cape Town experienced chaos when a taxi strike started on Thursday with three Golden Arrow buses in Nyanga and Philippi burned down. At a meeting held at the Desmond Tutu Sports Centre, the South African National Taxi Council (Santaco) decided to halt taxi operations, resulting in the strike.
According to a representative of the South African National Taxi Council, they resolved to withdraw all taxis from the ranks in the region. The strike will continue until August 9th, and taxi services will resume on August 10th.
The strike caused significant disruptions in public transportation and added to the already tense situation in the city. Authorities are monitoring and working towards restoring normalcy and addressing the arising challenges.
Former Eskom CEO André de Ruyter lands a role at Yale University: André de Ruyter, the former Eskom CEO who left his position in February, has landed a prestigious role at Yale University in the United States. In his new capacity, he will lecture on fascinating subjects, including renewable energy. De Ruyter's departure from Eskom followed a courageous interview where he exposed deeply rooted corruption within the organization. Shockingly, he revealed that up to R1 billion was being embezzled each month. His new role is an exciting addition to the university's academic lineup.
Markets: On Monday, the rand experienced a decline, further contributing to its losses of over 4% against the dollar in the previous week. The global markets were cautious due to a mixed US jobs report and upcoming US and Chinese inflation figures later in the week. During this period, the dollar strengthened by approximately 0.2% against a basket of global currencies.
Looking ahead: This week will witness several crucial economic data releases. China will release its July Consumer Price Index (CPI) numbers on Wednesday. Thursday will feature two significant events for South Africa when the mining production and manufacturing numbers will be released. The United States will release its Headline inflation numbers on Thursday, while the focus will be on the US on Friday, with the release of the Producer Price Index (PPI) numbers.
