GLOBAL MARKETS
WORLD WAITING FOR CENTRAL BANK POLICY
Emerging market currencies on the whole appreciated last week due to a weaker USD. The Brazilian real appreciated 0.76% for the week closing at 3.26/USD while the Polish Zloty traded at PLN3.86/ USD, an appreciation of 0.36%. Brent crude oil in the meanwhile closed the week 4.67% lower at USD46.56/bbl with renewed fears of oversupply and sufficient demand globally. Markets were still paying close attention to vital upcoming central bank policy meetings (Bank of Japan, Bank of England, South African Reserve Bank and most importantly the US Federal Reserve Bank) as these could impact markets substantially.
In her final speech before the September Fed policy meeting, Fed governor Lael Brainard maintained her dovish outlook despite the hawkish rhetoric from the Fed in recent weeks. Ms Brainard cited risks such as inflation being below the target band and the impact that international risks may have on the US economy, adding that caution should therefore be taken when hiking interest rates.
In economic news, US retail sales for August disappointed at -0.3% m/m, when markets were expecting a print of -0.1%. US producer price inflation also came in lower than expected. Consensus was for a print of 0.1% y/y and it came in at 0.0%. Industrial production also disappointed for August coming in at -0.4% m/m vs expectations of -0.2% m/m. With the FOMC policy meeting looming, the dovish comments and disappointing economic data lowered the probability of a rate hike.
In the UK, the Bank of England kept interest rates unchanged at 0.25% as expected. However, they hinted that there may be further rate cuts and reiterated that the economic outlook has not changed since Brexit, although data has come out stronger than expected since then. The pound depreciated on the back of this news trading 2.03% lower at USD1.30/GBP for the week. Unemployment in the UK came in at 4.9% for the three months ended July 2016 (lowest in 11 years), but there are concerns that the post Brexit slow-down in jobs growth may still be forthcoming.
In the east, industrial and consumer data out of China came in better than expected. Industrial production for August printed 6.3% y/y vs 6.2% expected while retail sales came in at 10.6% y/y above expectations of 10.2% y/y. Urban fixed asset investments, which is viewed as a proxy for long term spending, was up 8.1% y/y for August when consensus was for 7.9%.
The MSCI World Index traded at 0.68% lower on the week while the MSCI Emerging Markets index ended the week 2.63% lower. As mentioned, focus will now be on the central bank policy meetings and if the Fed were to surprisingly hike rates, this could be negative to emerging market currencies and markets. A depreciation in the ZAR and a sell off on the JSE would not be surprising in that event.
DOMESTIC MARKETS
ALL EYES ON MOODY’S SA VISIT THIS WEEK
Another global ratings agency has made the news in South Africa this week. This time, Moody’s revised their economic growth forecast for South Africa downwards to 0.2% y/y for 2016 and 1.1% y/y for 2017. They have also placed five State Owned Enterprises (SOE), namely Eskom, the Development Bank of South Africa, the Industrial Development Corporation, SANRAL and Land Bank on immediate review for downgrades due to the increased risk of funding and liquidity challenges these enterprises now face.
According to the September Quarterly bulletin released by the South African Reserve Bank (SARB) this week, the current account deficit compressed to -3.1% of GDP in Q2 2016 when expectations were for -3.0%. The trade balance has now swung into a surplus of R33bn for Q2 2016 from a deficit of R-48bn in Q1 2016. The trade surplus was primarily due to a 9.1% increase in merchandise exports owing to a lagged effect of a weaker rand. However, merchandise imports also increased by 2.1%, driven mainly by agricultural and crude oil imports.
Retail sales growth data for July, released by Stats SA, came in at 0.8% y/y. This print was worse than expected (1.9% y/y) and this was due to lower consumer confidence, tighter financial conditions and subdued growth in real household disposable income. The main contributors to retail sales growth were sales of non-durable and semi durable goods, pharmaceuticals and toiletries (6.3% y/y) and textiles/clothing (4.3% y/y) while the detractors were durable items like furniture and appliances (-8% y/y).
The JSE All Share index dropped -2.71% last week. The largest movers were resources (JSE Resources 20 falling -4.28%) while the industrial and financial boards both fell 2.45%. The rand was the best performing emerging market currency, appreciating 1.62% vs the dollar and closing at ZAR14.13/ USD last week.
Megan joined the Brenthurst Wealth team in March 2026 as an Administrative and Fiduciary Services Assistant at our Val de Vie Office in the Western Cape. Prior to joining Brenthurst, Megan gained three years of experience in the retail sector, where she developed management and client service skills.
I obtained my National Diploma in Financial Information Systems from the Cape Peninsula University of Technology in 1999 and have worked in the wealth management industry since January 2000. Over the years, I have gained extensive experience in various roles, including Portfolio Manager Assistant, Planner Assistant, and Paraplanner.
Esmarelda Isaacs-Andreas joined the Brenthurst Wealth Stellenbosch office in October 2025, taking on the dual role of Receptionist and Fiduciary Administrator.
I obtained my National Diploma in Financial Information Systems from the Cape Peninsula University of Technology in 1999 and have worked in the wealth management industry since January 2000. Over the years, I have gained extensive experience in various roles, including Portfolio Manager Assistant, Planner Assistant, and Paraplanner.
Ashley joined Brenthurst Wealth in January 2025 as Office Administrative Assistant and Receptionist for the Stellenbosch Office.
René Heystek joined Brenthurst Wealth in November 2023, as receptionist and administrative assistant in the newly established George/Garden Route office.
Michelle Heystek has built a career in the financial services over the last two decades, after obtaining her B.Com degree in Financial Management in 2005. Once she joined Brenthurst in 2006, she continued her academic journey, obtaining her Certificate in Wealth Management from INSETA in 2007, followed by a Postgraduate Diploma in Financial Planning from the University of the Free State. In 2008, she earned the Certified Financial Planner (CFP®) designation.
Anelle joined Brenthurst Wealth as a Receptionist and Administrative Assistant to Brian Butchart in the Cape Town office in December 2023. She has a wealth of knowledge from working as a liaison between Financial Advisers and clients at TMA and Absa Investment Management Services (Aims) since 1998. She obtained her B. com degree from the University of Port Elizabeth in 1997.
ADMITTED ATTORNEY | FINANCIAL PLANNER & HEAD OF BRENTHURST FOURWAYS
Sanet was appointed in April 2020, joining our Cape Town team as an Executive Administration Assistant to Renee Eagar. She has been in the financial services industry since 1990. Her previous experience includes positions at Sanlam, BJM and ABSA. She spent her last 12 years working at Alexander Forbes Private Client Wealth as a Senior Wealth Management Assistant. She has received numerous accolades over the years which include but not limited to, Alexander Forbes Client Service Excellence – Silver award in 2014,2015 and 2017. Sanet has also obtained her Certificate in Wealth Management (NQF 5) in 2012 and achieved “Best Student of the Year” from Moonstone.
Maria Smit is a Certified Financial Planner® with over 10 years of experience in the financial planning industry.
