Your Monday Wake Up Call 17 July 2017

What to look forward to this week

Last week was fairly good week for the JSE, particularly on Friday where the Rand broke down below R13 to the US Dollar. This was mainly a result of weak US economic data which led to the weakening of the greenback against major currency pairs, as well as the suspension of proposed new mining laws. Thank goodness it is a new week and with it comes new opportunities. We have highlighted some key events that might be of significance this week.

• The week is off to a good start after the release of Chinese economic data which came in better than expected in the early hours of this morning. GDP year-on-year came in at 6.9% on the back of an estimate of 6.8%, Retail Sales year-on-year also beat expectations to come in at 11.0% on the back of an estimate of 10.6%. A number that will inspire commodity producers is the Industrial Production year-on-year number that was recorded at 7.6% on the back of a forecast of 6.5%.

• Locally, the South Africa Reserve Bank is expected to announce its rate decision on Thursday. The expectation is that the repo rate will be kept unchanged at 7.00%. Prior to that rate decision we are expecting CPI & Retail Sales data on Wednesday. CPI year-on-year is expected to decrease to 5.2% from the prior recording of 5.4%. Retail Sales year-on-year is expected to come in at -0.3% after a prior surprise increase of 1.5%.

• On the international front, we are expecting CPI data for the Eurozone, the United Kingdom, New Zealand & Canada during the course of this week. There should be some volatility in the underlying currencies when this data is released therefore currency traders should take note of those releases.

• Wednesday brings the USA into focus with the release of Building Permits and Housing Starts numbers. You can also expect the weekly Crude Oil Inventories number which is expected to show a draw of at least 7.6 million barrels.

• On Thursday, attention shifts to interest rate decisions from the Bank of Japan and the European Central Bank. The consensus for both of those decisions is that they will leave rates unchanged. With the recent increase in hawkishness of most major central banks it would not be surprising if one those rate decisions resulted in a rate increase. Investors will also be looking for indications on how soon and aggressive the anticipated tapering will be from both of these banks. From the USA, you can expect the weekly Initial Jobless Claims numbers as well as the Philly Fed Manufacturing Index.

• Besides the CPI numbers from Canada, Friday will be a fairly light day in terms of economic data. The one key element that traders need to keep a look out for is the US Dollar which will detect movements in safe haven assets such as Gold and other key commodities.

• Round 2 of Brexit negotiations begin today, the implications of Brexit have proven to be bad for the UK job sector as most banks have begun the process of moving most of their key staff to other major European cities from London. Expect volatility in the GBP/USD currency pair during the course of these negotiations.

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!

Musa Makoni | Trading Specialist at GT247.com

Follow @Makoni_Henry

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