Business News Today
Slow-down in South African Manufacturing Sector
The seasonally adjusted Absa Purchasing Managers’ Index (PMI) for South Africa’s manufacturing sector, declined to 49.2 points in October, down 1.6 points from 50.8 in September, signalling a return to contraction (below 50) after a brief expansion the prior month. This reflects ongoing challenges in the sector. Purchasing Prices – Rose modestly to 61.9 (up 0.2 points), influenced by mixed fuel price movements despite a stronger rand. Of more concern, New Sales Orders fell sharply to 48.9 (down 3.9 points), contracting for the eighth time in ten months amid subdued domestic demand.
Overall Business Activity dropped to 49.4 (down 5.0 points), marking the ninth contractionary month this year, while Supplier Deliveries saw a decline to 53.5 (down 1.4 points), due to lower order volumes for the period. The USD/ZAR exchange rate fell to 17.3388 this morning, down 0.04% from the previous session. Over the past month, the South African Rand has weakened by -1.03%.
AI Data Centres Running out of Power Sources
With the supply of processor chips firmly established in the supply chain of the AI giants, it is power supply that is becoming the most scarce commodity for the industry. Microsoft, Google and Open AI are all facing the same crises – not enough power supply. yesterday Microsoft CEO Satya Nadella, during a podcast spoke about the reality that the AI industry cannot yet determine how much power supply they will need ultimately for AI development. “The cycles of demand and supply in this particular case you can’t really predict,” Nadella said on the BG2 podcast.
Last week Google said it is working with NextEra Energy to revive a nuclear power plant in Iowa that had closed in 2020. The plant is expected to be back online by 2029 only, however it establishes the extent of the power constraints the industry is creating. AI data centers (hyperscale facilities optimized for training and inference) are significantly more power-intensive than traditional ones due to high-density GPU clusters. A typical size facility draws around 100-150 MW of power continuously, translating to roughly 80-100 GWh of electricity per month, roughly the same consumption of around 150 000 households in South Africa.
Indian Ocean Shipping Piracy Ignites Again After Lull
Reports from Reuters this morning indicate that armed assailants attacked a commercial tanker off the coast of Mogadishu yesterday, firing at the vessel after attempting to board the ship in the first suspected Somali piracy incident of its kind since 2024 according to maritime sources. Should this be confirmed, this would be the first Somali Pirate attack against a commercial cargo ship since May 2024. This would raise the possibility of having major disruptions to trade routes and supply chains that could affect multiple industries.
The vessel was sailing some 332 nautical miles (615 km) off the Somali coast when armed attackers approached in a skiff from the starboard side and opened fire, British maritime risk management group Vanguard said in a note. “The crew raised the alarm, increased speed, and conducted evasive maneuvers. The onboard security team onboard responded effectively, deterring the attack and preventing any damage or injury. The vessel targeted was the Cayman Islands-flagged chemical tanker Stolt Sagaland according to the statement from Vanguard.
Breaking News Shorts:
- The International Finance Corporation, is planning to expand their local-currency lending and direct investments into companies across Africa to help projects reach the scale required to attract major global funds, Managing Director Makhtar Diop told the Africa Financial Summit yesterday.
- Waymo announced yesterday that it will launch their robotaxi service in Detroit, Las Vegas, and San Diego as the Alphabet-owned company looks to accellerate its expansion plans. “By the end of 2026, you should expect us to be offering 1 million trips per week,” co-CEO Tekedra Mawakana said
- The Italian government has announced a significant increase in the issuance of work permits for non-EU workers, planning to distribute 500,000 permits between 2026 and 2028. This new initiative highlights the urgent need to tackle labor shortages across various sectors, especially in construction.
- OpenAI has signed a $38bn contract with Amazon to access its cloud computing infrastructure, as the start-up continues its run of major partnerships to secure computing power. The seven-year agreement, will provide OpenAI with access to Nvidia graphics processors they plan to train its artificial intelligence models on.
- The yield on the US 10-year Treasury note held at three-week highs around 4.1% this morning, as Federal Reserve officials signalled a cautious approach to further interest rate cuts. Fed Governor Lisa Cook acknowledged increasing labor market risks but stopped short of supporting a December cut
- Arabica coffee futures surged to around $4 per pound, the highest since October 24, pressured by the continued decline in certified coffee inventories. coffee-producing regions experienced irregular and scarce rainfall during the last flowering cycle in October, raising concerns about flowering and fruit set for the 2026 crop.
Markets by Numbers
Currency markets indicate the US dollar stronger today, with the Euro trading against the US dollar at 1.15084 while the Pound is trading at 1.31213 to the US dollar. The Yen is currently trading at 153.92 to the dollar. The rand (ZAR) is currently at R17.34 to the US dollar.
Commodities:
- Gold futures have dropped below the $4000 mark earlier this morning, and are currently trading around $3983.80 per ounce.
- Copper prices have fallen by almost -1% this morning, with prices currently around $4.9819
- Silver futures prices are trending marginally lower today, and currently trading around $48.046
- Platinum futures are trending over -0.5 lower this morning, and currently trading at $1556.70, While Palladium prices are trending over -1% lower today, and are currently trading around $1429.50 per ounce.
- Brent crude oil prices have slipped today, and currently at $64.69 with WTI trading lower at $60.89
- Cocoa futures have gained slightly this morning, and currently trading around $6553.33 per ton.
- Coffee futures have surged by over 4% today, and are currently trading at around $4.0865 per pound
Crypto Currencies:
- Bitcoin prices have fallen further today dropping by -0.6% and currently trading at around $106220 per coin
- Ether prices are trending lower today, and are currently trading around $3594.99
- $Trumpcoin is trending lower today, and currently trading around $7.126
(All prices quoted at approximately 07H20 Central African Time)
Africa News Briefs:
- Tanzania’s President Samia Suluhu Hassan has been sworn in as president yesterday after a shameful election that saw all major opponents banned or incarcerated prior to the elections. The disputed election sparked protests with protestors killed by security forces, after two main opposition candidates were barred from running. Tension remained high in the commercial capital, Dar es Salaam, following three days of election protests. Gas stations and grocery shops were closed with streets were nearly empty as government employees continued to work from home. I
- The military junta leader in Guinea, Gen. Mamadi Doumbouya, has entered the presidential race and submitted his bid yesterday to be a candidate for the presidential election in December. This despite promises he made that he would hand over power to a civilian government and his promise not to run for the office after he led soldiers in seizing power four years ago. Doumbouya, would remain leader of Guinea for another seven years if he wins the election.
