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Monday Morning Wake up Call 5 November 2018

Musa Makoni

What to look forward to this week:

Investors found some reprieve last week as global markets rebounded on the back of good US corporate earnings and optimism over the potential of a trade deal between China and the USA. On the JSE, Naspers led the resurgence as its Hang Seng listed associate recovered significantly to close the week above HK$300 per share. This week gets off to a tricky start for the energy sector as the USA’s sanctions on Iran kick in on Monday. We have already seen brent crude prices retreat over the past month and it will be key to see how Iran responds to these fresh sanctions. Asian markets have already opened in the red which could set the precedent for this week, however there are a lot of factors which could turn things around before the end of the week. I have highlighted some of the key events to look forward to this week below.


  • To kick start the week on Monday, we are expecting earnings results from Redefine Properties on the JSE, and in terms of local economic data we are expecting the release of the Standard Bank PMI data, as well as the SACCI Business Confidence index number. On the international front, the United Kingdom is expected to release its Services PMI data at 11.30am. From the USA, we are expecting Final Services PMI data at 4.45pm, and ISM Non-Manufacturing PMI data at 5pm.


  • On Tuesday, the Reserve Bank of Australia is expected to announce its interest rate decision and initial estimates suggest that the bank will leave rates unchanged. At 9am, we are anticipating German Factory Orders data, and we are expecting Services PMI data from most of the countries in the Eurozone. In the USA, the mid-term elections will be taking place and we can expect significant volatility in the markets regardless of the party which gains the majority. We are not expecting any data locally.


  • German Industrial Production data will get the day started on Wednesday and initial estimates suggest a contraction of 0.1%. At 11am, we are expecting Italian and Eurozone Retail Sales data, and later at 5.30pm we are expecting the weekly Crude Oil Inventories data from the USA.


  • On Thursday, local Mining Production data for the month of September is expected to be released at 11.30am and forecasts suggest another contraction will be recorded. We are also expecting South African Manufacturing Production numbers at 1pm. On the international front, Chinese Trade Balance data is expected early that morning and this will be significant. At 9am, we are expecting Trade Balance data from Germany and later on that afternoon we are expecting the weekly Initial Jobless Claims numbers from the USA. Later that evening at 9pm, all eyes will be on the US Fed for announcement of its interest rate decision. Initial estimates suggest that the Fed will leave rates unchanged.


Gold Fields is expected to release its operational update for the 3rd quarter on Friday morning. We are also expecting earnings results from Richemont and Telkom SA during the day. On the international markets, China is expected to release its CPI and PPI numbers at 3.30am, before attention shifts to the United Kingdom for the release of GDP, Manufacturing Production, Construction Output and Industrial Production.

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