Today’s the day that Moody’s decides

Moody's is due to publish its latest assessment of South Africa today – by US law, Moody's must issue its latest take on SA's sovereign credit rating on 1 November. So, by the end of the day, we'll know if it's good news – a positive rating outlook-– or bad news, which would mean a negative outlook and the threat of a rating review, which could, in turn, lead to a rating downgrade. There's also the possibility that the report may be neutral, with no changes to the outlook.

In conducting its assessment, Moody's will doubtless be considering the mixed bag of economic information we've seen lately, including the plan for Eskom and the medium term budget. While there was much to celebrate, the mid-term budget, in particular, made it clear that SA's economic situation is bleak. Debt is high and rising, growth is low, and getting to a better place is going to involve some hard choices. Moody's must decide whether it believes the SA government has the political will to make those choices.

On the plus side, even if Moody's changes the outlook to negative, it could be a while before the country's rating is actually downgraded – it can take as long as 18 months for a downgrade to follow a change in outlook. Whatever happens, Moody's decision will be among today's most closely watched news.