The FNB HPI showed that house prices were softer during 1Q19, compared to 1Q18. House price growth is reeling from the depressed levels of disposable income growth, due to weak labour markets, higher taxes and the rising cost of living. Mining production contracted by 1.1% y/y in March 2019, while manufacturing production surprised to the upside, rising 1.2% y/y in March.
The first estimate of 1Q19 US GDP revealed that the economy expanded by an annualised rate of 3.2%. The personal consumption expenditure price index has remained below the 2% target for five consecutive months, potentially signalling that domestic demand is slowing. We expect subdued business confidence to prevent corporate credit from trending meaningfully higher. The trade balance registered another surplus of R5 billion in March from R3.9 billion the previous month.
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