The expectations remains that we are in for a shock when the fuel price is announced for the month of October and economist opinion remains that a price increase of around R 1,00 can be expected. That will increase the fuel price close to R 17,00 a litre.
The rand / dollar exchange rate, R15,21 / $1 remains volatile with oil prices, $77,58 / barrel for Brent crude, steady at the higher levels reported.
The markets are awaiting the manufacturing results for the month of July 2018.
On Monday the agribusiness confidence index will show the investment sentiments of agribusiness on the back of the land policy discussion.
The sector dragged down economic growth in the first and second quarters.
On Tuesday Stats SA will release the July manufacturing numbers. The July PMI survey suggested that manufacturing activity picked up slightly at the start of the third quarter, after detracting from growth in the second quarter of 2018.
Retail sales will be released on Wednesday, while mining production is scheduled for release on Thursday.
"We don’t expect manufacturing output to have responded as enthusiastically," said First National Bank (FNB) chief economist Mamello Matikinca.
South Africa currently in a technical recession due to a reducing production figures for the first and second quarter of 2018.
At this point in time Moody's is the only rating agency who has kept South Africa above junk status but it is expected that if the recession continues that they will consider a down grade. The impact of that will be an outflow of capital from South Africa which will have an immediate negative effect on the rand / dollar exchange rate and subsequent effects.
The effects on consumer's will be devastated, if not improving, which will lead to higher transport and food prices, increase in prices for services etc. This in turn will lead to higher inflation and the Reserve bank will have little choice but to increase interest rates which our over - stressed consumer's will find difficult to absorbed.
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