The US-China trade truce, announced last week, while affording both sides some breathing room, will do little to resolve the deep differences between the two nations. While both Trump and Xi Jinping hailed it as a domestic victory, they also took pains to detail areas in which they would not compromise. The need for some kind of truce has been growing as both countries have seen the adverse effects of the tensions. China’s economy has slowed more than expected, while American farmers and some manufacturers are starting to feel the bite. Experts have mixed views about the agreement with some expressing optimism while others have warned that this could turn out to be a hollow deal.
Non-OPEC member Russia and Saudi Arabia have agreed to extend OPEC’s efforts to stabilise the oil market. But while most producers have made it clear that that they agree on a need to cut production, there is no consensus about how much. Market analysts are saying that Saudi Arabia’s suggestion of 1m barrels per day will likely not be enough. Compounding the problem is that for the first time since 1973, the US is now exporting more oil than it imports, and it is not party to any output deal. Together, the US, Russia and Saudi Arabia account for almost 60% of global consumption.
The problems at Eskom continue to pose one of the greatest risks to SA’s economic recovery, while the recent load- shedding will impact business and consumer confidence. The Minister of Public Enterprises Pravin Gordhan has emphasised that the power utility is now in crisis mode and that the immediate objective is to avoid power cuts. With this objective in mind, National Treasury has given Eskom the go-ahead to procure emergency diesel to limit the load shedding. The longer-term strategy is to stabilise the power utility to ensure that the lack of working capital does not become a problem.