Leaders gather for annual G20 Summit
Buenos Aires G20 Summit
US President Donald Trump and Chinese President Xi Jinping agreed to keep their trade war from escalating with a promise to halt the imposition of new tariffs for 90 days as the world’s two largest economies negotiate a lasting agreement.
With the year racing to an end, leaders of major economies gathered in Buenos Aires for their annual G20 summit. US President Donald Trump and Chinese President Xi Jinping agreed to keep their trade war from escalating with a promise to halt the imposition of new tariffs for 90 days as the world’s two largest economies negotiate a lasting agreement.
The European Union signed off on the Brexit agreement with the United Kingdom on Sunday, which deal now needs to be ratified by the British Parliament on December 11. If lawmakers do not ratify the pact, the odds of a disorderly Brexit process will increase significantly. An analysis released in the past week by the Bank of England projects that in the case of an untidy Brexit, the UK economy would contract by 8% in the immediate aftermath. The central bank foresees a nearly 33% decline in house prices, a 48% dive in commercial real estate values and a 25% slump in the value of the pound.
Back on the domestic front, South Africa is experiencing a new round of load sheading that will have an effect on local economic growth.
Annual headline producer price inflation for final manufactured goods rose to 6.9% in October, Statistics SA reported on Thursday. This is the highest annual increase since December 2016, when the rate rose by 7%.
Official data released by the South African Revenue Service on Friday showed that South Africa’s trade deficit widened to R5.55bn in October, up from a revised R3.83bn recorded in September. The increase was the largest in 10 months and the deficit was attributed to exports of R122.32bn and imports of R127.87bn.
The good news is that the price of Brent crude oil remained stable under $60 a barrel, which, together with the stronger rand, means a substantial reduction in the fuel price is almost guaranteed. This will have a knock-on effect on inflation and South Africans will have some extra cash on hand over the festive season.
In next week’s last newsletter of the year, we will provide an overview of the past difficult year for the markets.
SECURITAS – Wealth Management
An investor who has all the answers doesn’t even understand the questions.
Sir John Templeton