Vehicle sales are a leading indicator of economic growth, and a sustained increase in this number should bode well for the local economy.
New vehicle domestic sales grew by 3% in June, ahead of industry expectations, according to figures released by the National Association of Automobile Manufacturers of South Africa (NAAMSA). Vehicle sales are a leading indicator of economic growth, and a sustained increase in this number should bode well for the local economy.
Local markets closed the week 0.50% lower at 57 314 points, with the resources sector losing 2.15%. The financial sector gained 1.10%, supported by a stronger rand-dollar exchange rate. The currency strengthened to around R13.53 to the greenback.
US hiring topped forecasts in June, while unemployment rose from an 18-year low. Wage gains unexpectedly slowed, indicating the labour market has room to keep expanding. US labour department figures showed that nonfarm payrolls climbed by 213 000. The S&P 500 index closed 0.67% higher on the back of this news.
The Chinese bear market slump deepened, with the Shanghai gauge closing at its lowest since March 2016, while the yuan resumed its decline as traders braced for US tariffs. The Shanghai composite index closed 3.52% lower.
In the UK, Prime Minister Theresa May imposed her vision of a soft Brexit on her divided Cabinet, pleasing business with a plan to keep close trade ties to the European Union (EU) and telling insolent ministers to get behind her or resign. Her plan, which would set up a free-trade area with the EU and mirror EU rules for goods and food, goes against much of what pro-Brexit Cabinet ministers have long demanded. However, after months of threatened resignations or leadership challenges, none has so far materialised. The FTSE reacted negative to the news and closed 0.44% lower.
The price of Brent crude oil came down by around $1.70 per barrel, and with a stronger currency, consumers could see some relief at the pumps. Cabinet’s economic cluster is considering allowing the National Treasury’s expert panel on zero-rated VAT items to expand its scope of work to include reviewing recent fuel price hikes.
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