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Monday Morning Wake up Call 10 December 2018

Musa Makoni



What to look forward to this week

Global markets struggled last week after a sell-off was induced by concerns of an inversion on US Treasury yields, which is seen as the precursor to a potential recession. Locally, the JSE has faced significant volatility as we have seen big swings in-between the 5 trading sessions. In the USA, the economy grew slower than anticipated as it only added 155 000 jobs compared to the forecasted 200 000 jobs. The US dollar has been volatile, and this has filtered onto other global currencies including the rand. The trade tensions between China and the USA will remain the dominating factor for global markets for the foreseeable future until a resolution is reached. Below I have highlighted the key events that you can expect in this week’s trading.

  • Monday kicked off with GDP numbers from Japan which showed a contraction of 0.6% QoQ which is worse than the forecasted contraction of 0.5%. Germany is expected to release its Trade Balance numbers at 9am, before attention shifts to the United Kingdom at 11.30am for the release of GDP, Manufacturing Production, Construction Output, Goods Trade Balance and Industrial Production numbers. Locally, we are expecting results for the eXtract Group.


  • Early on Tuesday morning, Japan is expected to release its Machine Tool Orders and from China we are expecting Foreign Direct Investment data. At 11.30am, the United Kingdom is expected to release its Average Earnings Index and Unemployment Rate data. At 3.30pm, the USA is expected to release its PPI data but most of the attention will be on the UK parliament for the Brexit vote. Locally, we are expecting Mining Production and Manufacturing Production data for the month of October. In terms of earnings we are expecting results for Alexander Forbes and Vivo Energy.


  • To start off Wednesday, we are expecting Core Machinery Orders and PPI out of Japan. At 11am, we expect Industrial Production data from the Eurozone and at 3.30pm the USA is expected to release its CPI data. At 5.30pm we expect the weekly Crude Oil Inventories numbers. Locally, we expect Statistics SA to release CPI readings at 10am.


  • German and French CPI data is expected at 9am and 9.45am respectively on Thursday. The Swiss National Bank is anticipated to leave rates unchanged when it announces its interest rate decision at 10.30am, and we are expecting the ECB to leave rates unchanged when the announce their decision at 2.45pm which will be followed by the press conference at 3.30pm. At that same time, we expect the weekly Initial Jobless Claims numbers out of the USA. In terms of local economic data, we are expecting PPI readings for the month of November, as well as Retail Sales numbers for the month.


  • Focus will be on China on Friday morning for the release of Fixed Asset Investment, Industrial Production and Retail Sales data. Japan is expected to release Manufacturing PMI and Industrial Production numbers. We are expecting Manufacturing and Services PMI numbers from most of the countries in Eurozone as well as the USA. At 3.30pm, the USA is also expected to release its Retail Sales numbers, while at 4.15pm we can also expect Capacity Utilization and Industrial Production numbers.


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!