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Monday Morning Wake up Call 08 October 2018

Musa Makoni

The impact of US Treasury yields rising to 7-year highs has had a negative effect on emerging market currencies including the rand. The rand has pulled back and is looking to retest R15/$ once again. Chinese markets are open again after a week-long holiday, however the big story out of that market is that the Chinese central bank has cut the reserve requirement ratio for the 4th time this year. The impact of a cut in the reserve requirement is increased liquidity within the market but it also has a negative impact on the Chinese Yuan. US unemployment rate data released on Friday came in better than expected which should give the US Fed an incentive to hike rates once more before the end of the year. Locally, markets remain under pressure as uncertainty continues to prevail. It should be an interesting week nonetheless as US earnings season is set to kick-off with earnings from Friday. I have highlighted a few key events for traders to look out for during the coming week. 


  • US and Japanese markets will be closed on Monday therefore activity will be subdued and there will be no activity from US treasuries which have dominated market trends over the past week. Germany Industrial Production numbers released early on Monday morning disappointed as they recorded a contraction of 0.3%.


  • On Tuesday, Japan is expected to release its Current Account numbers and initial estimates suggest an increase in the current account surplus from the prior recorded level. At 8am, we are expecting Trade Balance numbers out of Germany. We are not expecting any data locally.


  • Wednesday will be a bevy of activity with regards to economic data. Japan will kick off the day with the release of Core Machinery Orders and Machine Tool Orders data. In Europe, France is expected to release its Industrial Production data at 10am, before attention shifts to the United Kingdom at 10.30am for the release of GDP, Manufacturing Production, Goods Trade Balance, Industrial Production and Construction Output data. The USA is expected to release its PPI and Wholesale Inventories data 2.30pm and 4pm respectively. Locally, we are anticipating the release of the SACCI Business Confidence index numbers.


  • On Thursday morning Japan is expected to release its Bank Lending and PPI data. However most of the attention will be on local Manufacturing Production numbers for August which are set for release at 11am. From the USA, we are expecting CPI data, as well as the weekly Initial Jobless Claims numbers and Crude Oil Inventories data.


  • China kicks off Friday with the release of its Trade Balance numbers. Japan is slated to release its Industry Activity data at 6.30am, while Germany is expected to release its CPI data at 8am. We are expecting Industrial Production numbers for the Eurozone at 11am and the numbers are forecasted to show an improvement from the prior recorded number. From the USA, earnings are expected from JPMorgan Chase, Wells Fargo and Citigroup. We are also expecting Consumer Sentiment data at 4pm which should conclude the week.


We will be keeping tabs on the events in the markets. Check out our blog for market updates, insights from our GT247.com team, and our independent analysts. Not sure about a trade? Call the GT247.com Trading Desk on 087 940 6102, and bounce your idea off one of our dedicated traders.

Until next week, we wish you profitable trading!

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