Market News

JOHANNESBURG, Sept 9 (Reuters) – The South African rand softened in early trade on Tuesday before the release of second-quarter gross domestic product (GDP) data, which is expected to show economic growth picked up from the first three months of the year.

At 0639 GMT the rand traded at 17.4875 against the dollar, about 0.1% weaker than Monday’s close.

Statistics South Africa will publish the data at 0930 GMT, with economists polled by Reuters forecasting GDP to inch up to 0.5% from 0.1% in the first quarter.

Nedbank economists estimated growth of 0.6%, saying in a research note that recent data point to a broad-based improvement in economic activity over the quarter.

They added that the most significant boost would come from rebounds in mining and manufacturing, which had stunted growth in the previous quarter.

“Both sectors benefited from continued albeit patchy global demand, firmer domestic demand and better operating conditions.”

The coalition government is trying to lift growth through reforms, but longstanding problems like logistics bottlenecks at ports and on the freight rail network continue to hold back Africa’s biggest economy.

South Africa’s benchmark 2035 government bond was also slightly weaker in early deals, as the yield rose one basis point to 9.545%.

(Reporting by Sfundo Parakozov; Editing by Kirsten Donovan)