Your Monday Wake Up Call

What to look forward to this week

The markets have been choppy of late and locally volatility was at its peak last week as the JSE couldn’t maintain a clear trend. On the global scale the US Dollar is still relatively weaker compared to a basket of major currencies, and this has inversely given direction to safe haven assets such as Gold.

• Locally, we are expecting Non-Farm Payrolls data on Tuesday. The prior recorded numbers reflected marginal increases of 0.2% quarter-on-quarter, and 0.9% year-on-year. On Thursday, we are expecting PPI data from StatsSA which is expected to be slightly higher than the previously recorded levels for both the quarter-on-quarter and year-on-year numbers. The big one is the Trade Balance numbers on Friday which is expected to reflect a surplus of R10.8 Billion, up from R5.1 Billion. If that data comes out as expected, we might see more upside in the Rand relative to major currency pairs.

• On the political front, the big story was the ruling by the Constitutional Court on the application made by UDM for the parliament to have a secret vote on the motion of no confidence against President Jacob Zuma. The ruling was that the speaker of parliament has the powers to declare a secret ballot, therefore the next step is to wait & see if the speaker of parliament will allow for the secret vote to happen.

• On the international front, there is a bit more activity in terms of economic data compared to last week. Today we are expecting Durable Goods Orders data from the USA which should give some insight into US economic activity month-on-month. The last recording was a contraction of 0.5% but the forecast for this month is that it will increase by 0.4%.

• On Tuesday and Wednesday, we are expecting speeches from key central bank governors as governors from the ECB, The US Fed, the Bank of Japan & the Bank of England will be speaking at different times during the course of those 2 days. We are expecting some volatility in the major currency pairs as a result and these scenarios will provide opportunities for profitable trades.

• On Wednesday, we can expect the weekly US Crude Oil Inventories and Pending Home Sales. The Crude Inventories number is of particular interest given the recent weakness in the global oil prices. An early estimate suggests that inventories might record another draw of at 500 000 barrels for last week. Evidence still suggests that there is an oversupply in the global markets and as such any relief in oil prices is not expected to be substantial at this point. Investors will eagerly be waiting for any announcement from OPEC with regards to possible actions that can prop up oil prices.

• On Thursday, the big number is the quarter-on-quarter GDP data from the USA which should give some indication into the performance of one of the world’s biggest economies. The forecast is that GDP will be recorded at 1.2% quarter-on-quarter. The GDP data will come out at the same time as the weekly Initial Jobless Claims numbers which is expected to show a decrease in claims to 240 000, from 241 000 last week.

• On Thursday, you can expect CPI data from Spain & Germany and on Friday we also expect CPI data from Japan and the Eurozone. China is expected to release its Manufacturing & Non-Manufacturing PMI data which should shed some light into economic activity in the world’s largest economy. 

• German is expected to release its Retail Sales numbers, the United Kingdom its GDP data for the quarter, and from the USA we are expecting the Chicago PMI, Personal Spending and Personal Income data for the month.

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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