A range of recent US labour market data, including jobs created, the unemployment rate and wage growth, are encouraging signs of declining inflation and may lead to interest rate cuts. Equity and bond markets rallied after the data was released. If these trends continue, we expect that a US interest rate cut could happen before the end of this year.

In SA, electricity supply is showing early signs of improvement, which has had a positive effect on some economic data, e.g. the manufacturing PMI for April. Electricity supply appears to have benefited from investments in solar energy, a scale-back in fleet maintenance (which may not be sustainable), the use of diesel in the early evening, and the return of some generating units to service. While Eskom may have made some progress, SA may not be able to avoid load shedding for the rest of the year.