Your Monday Wake Up Call 16 October 2017

What to look forward to this trading week

Last week both local and international markets took a small breather from hitting all-time highs but momentum was still strong nonetheless. The Rand managed to strengthen relative to major currency pairs and metal commodities, particularly Gold, has managed to find some momentum. US inflation and retail sales data missed slightly on Friday which resulted in the US Dollar sliding against major currencies, however it has since recovered from the slump. There is still some uncertainty with regards to Catalonia and their declaration of independence. As such expect some volatility in the Euro until a clear path has been carved out for Catalonia. Below I have summarised a few other key events that traders need to look out for this week.

Monday started off with CPI and PPI data from China. Chinese CPI came out in line with expectations but PPI year-on-year beat estimates to come in at 6.9% on the back of a forecast of 6.3%. The Eurozone is expected to release its Trade Balance numbers and later on this afternoon we can expect the Empire State Manufacturing Index for the USA.

New Zealand CPI data gets Tuesday started as its inflation is expected to tick up slightly from the previous recording of 0.0%. The United Kingdom and the Eurozone will also release its CPI data on Tuesday. That afternoon the Bank of England governor is expected to make a speech which should result in volatility for the sterling pound. The USA is also expected to release its Industrial Production and Capacity Utilization numbers. Locally Pick N Pay is expected to release its half-year results.

On Wednesday focus shifts to South African retail sales and CPI data. Retail sales are expected to show an improvement from the prior recording whilst inflation is expected to creep up slightly to 4.9%. In Europe, Mario Draghi is expected to make a speech that morning and around the same time we expect the United Kingdom to release its Average Earnings and Unemployment Rate numbers. From the USA we are expecting Housing Starts and Building Permits numbers as well as the weekly Crude Oil Inventories numbers.

Australia will release its Unemployment Rate and Employment Change numbers on Thursday morning, but major focus will be on China because it is expected to release its GDP, Industrial Production and Retail Sales numbers. These numbers will be particularly interesting for global metal commodity producers. The UK is also expected to release Retail Sales data and then from the USA we can expect the weekly Initial Jobless Claims numbers and the Philadelphia Fed Manufacturing Index.

Friday will be relatively subdued in terms of economic data with the biggest numbers being CPI and Retail Sales numbers from Canada. Towards the JSE close we expect the USA to release its Existing Home Sales numbers. On the JSE, Dis-Chem is expected to release half-year results and given the strong rally of the share price lately, the market will be watching those results closely.

In terms of economic data the week seems relatively subdued but there will definitely be plenty of volatility to take advantage of. The strength of the US dollar and inversely the Rand, will be the main catalyst of price action on the JSE therefore keep a close eye on those two currencies. If metal prices remain bullish we might see a small rally for JSE listed miners.

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!