AUTOMOTIVE: Magna (MGCN A3[N]/A-[N]/NR): Moody’s Outlook Negative
Apr-30 06:49
"Moody's Ratings affirms Magna's A3 ratings; outlook changed to negative" - Moody's...
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SOUTH AFRICA: ... But Relations With US Continue To Sour (2/2)
Mar-31 06:47
- Latest reports suggest that the US have been tightening the screws on South Africa on several fronts amid escalating bilateral tensions. The US cut all military assistance and co-operation with the South African Defence Force (SADF), according to an internal memo seen by the Sunday Times. In addition, according to a piece in Afrikaans-language outlet Rapport, the US told South Africa’s military attaché Brigadier Gen. Richard Maponyane that he was no longer welcome in the country. Freedom Front Plus (FF+) party revealed South African companies were among those targeted by US export restrictions for allegedly providing support and training to Chinese fighter pilots.
- This comes amid an escalation in tensions between the US and South Africa, which recently resulted in the expulsion of the South African ambassador. The spillover into military cooperation may generate further problems as Pretoria is struggling to maintain its military capabilities amid a failed stabilisation mission in the DRC and reports suggesting that much of its air force is effectively grounded.
- South Africa is reportedly still looking to mend ties with the US but made it clear that it won't back down on its International Court of Justice (ICJ) case against Israel. Furthermore, the ANC said that its "leaders are not accountable to Washington" amid reports that the US could roll out personal sanctions against South African officials.
- Elsewhere, South Africa's M3 money supply growth slowed to +6.05% Y/Y in February from +7.10% prior, while private sector credit growth fell to +4.68% Y/Y from +4.59%. Monthly trade balance for the month of February will cross the wires at 13:00BST/14:00SAST.
SOUTH AFRICA: Optimism On Budget Talks Lifts Sentiment... (1/2)
Mar-31 06:47
- The rand received a boost from the news that last-ditch negotiations between the African National Congress (ANC) and Democratic Alliance (DA) on the 2025 National Budget seemingly brought some progress. The DA's spokesperson said that there was a "good chance" of an agreement between the two largest parties in the Government of National Unity (GNU), while President Cyril Ramaphosa said that he was confident that coalition partners would be able to "develop a shared approach." Separately, News24 reported that the ANC and DA were "close" to a deal on the future of the economy, following their revived talks held on Sunday afternoon.
- This takes the edge off earlier reports suggesting that the GNU moved closer to the brink of collapse on Friday, when the African National Congress (ANC) refused to bow to the pressure from the Democratic Alliance (DA) and give it more say over economic matters. This resulted in a temporary collapse of negotiations, before they resumed on Sunday.
- The National Assembly's finance committees will consider the 2025 Fiscal Framework on Tuesday, before it is submitted for a plenary session on Wednesday. The vote on the first in a series of bills needed to adopt the Budget will be the first major test of support for the outcome of negotiations between GNU partners.
- USD/ZAR now trades at 18.2681, 0.9% lower on the session, erasing an upswing registered on Friday when ANC-DA talks stalled.
UK DMO UPDATE: DMO consultation today - we set out our issuance exp for 25/26
Mar-31 06:44
- We set out our expectations for gilt issuance across FY25/26 in our UK Issuance Deep Dive publication, published yesterday and available here.
- The DMO will hold its consultations regarding FQ1 (April to June) issuance at 15:30BST (investors) and 17:00BST (GEMMs) today.
- There are two syndications pencilled in for the quarter - one long and one linker. We pencil in a new 30-year conventional gilt (potentially with a Jul-55 maturity) but have less conviction surrounding the linker on offer.
- 5 further short auctions: 4.375% Mar-28 gilt (twice), 4.375% Mar-30 (up to twice more plus 9 April - MNI expect three in total), 4.00% Oct-31 gilt (at least once - MNI expects just the one).
- 4 further medium auctions: 4.50% Mar-35 (plus 15 April), 4.375% Jan-40 gilt (plus 3 April), 0.875% Jul-33 Green gilt (once). There is no guidance as to the third gilt - we would assume either the 4.50% Mar-35 or 4.375% Jan-40 gilt are options here. We favour the former despite the Green reopening.
- 2 further long auctions: 4.75% Oct-43 gilt (once), 4.00% Oct-63 gilt (once) (plus the already announced 4.375% Jul-54 gilt on 8 April).
- There are also two short programmatic tenders, one short or long programmatic tender and one linker tender in the quarter. We are not sure how much discussion there will be regarding these, given that the gilts on offer will only be announced 2 days before.
- The auction calendar for the remainder of the quarter is due for release on Friday at 7:30BST.
