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JOHANNESBURG – The steady and constant increases in international oil prices as well as the ongoing weakening of the rand exchange rate are worrying factors for most economists and policy makers.

Already, over the past 12 months, fuel prices in South Africa increased alarmingly as the cost of diesel went up by 278 cents a litre, or 22.9 percent, and petrol by 237c a litre, or 17.2 percent.

This is the highest annual increase of the main items within the South African inflation basket.

At this stage, it is expected that the fuel prices will increase by 55c a litre for petrol and by 5c a litre for diesel at the beginning of May.

During Friday, however, both these two alarming indicators started to improve remotely.

After touching the R14.50/$ level earlier in the week the rand started to improve to R14.30/$ on Friday afternoon.

In the same manner the price of Brent oil came down substantially on Friday from $74.70 (R1071.36) a barrel to $71.80 a barrel.

On international stock markets, an uncertain sentiment had driven share indices mostly down during the latter part of last week.

After the far better-than-expected earnings season reported by the US S&P 500 companies over the last week, investors took profits and expectations for a rather sideways movement in future earnings causing share prices to move downwards.

After touching a record high level of 2 933 points on Tuesday the S&P 500 index in the US lost some ground on Thursday, but started to recover on Friday trading, once again above the 2 930 level.

According to the Commerce Department, the US gross domestic product (GDP) expanded at a 3.2 percent annualised rate in the January-March period.

This is much higher than all forecasts.

The department also announced that underlying demand was softer as weak consumer spending and a gauge of inflation coming in below policy makers’ target.

This boosted stock worldwide on Friday as changes for further US interest rate hikes this year are now very slim.

On the JSE the all share index recorded a new record level this year of 59 444 points last Monday.

This is already 12.72 percent higher than the opening level of 52 736 points at the beginning of the year.

The slight sell-off of stocks on global markets, the weaker rand and higher Brent crude prices as well as scepticism from foreign investors on the Eskom saga pushed share prices downward.

The all share index ended the week on 58 807 points or 0.7 percent.

This coming week investors will look out for the release of South Africa’s inflation rate and retail sales data for March.

Globally the UK will release its latest unemployment rate, while China will announce its GDP growth rate for the first quarter 2019.

Attention during this week will also concentrate on many global developed countries that will release their latest Purchases Managers Indices (PMIs), balance of trade numbers and inflation rate figures.

And this coming week investors will watch out for the release of South Africa’s latest money supply and credit extension data, the release of the new motor vehicle sales and balance of trade data.

Globally attention will shift to the latest job data for various developed economies, especially those of the US. Most developing countries will release their latest PMI.

Chris Harmse: Chief economist Rebalance Fund Managers.