Your Monday Wake Up Call 30 October 2017

What to look forward to this trading week

It has been year since Donald Trump was elected President of the USA. We haven’t seen a major correction since then despite the major US indices repeatedly hitting all-time highs. Our local JSE All-Share Index has not been left out of that movement higher but this has been concentrated to a very few blue chip stocks. The South African medium-term budget speech delivered last week did not paint a bright picture of the future ahead. It will be key to see how the ratings agencies react to this speech in their next assessment of South Africa. Shifting to the present, this week seems jam packed with potential scenarios for traders to profit from. I have highlighted a few key events below that traders need to look out for this week

Monday started off with Retail Sales numbers from Japan which came in slightly worse than expected at 2.2% on the back of an estimate of 2.3%. German Retail Sales month-on-month came in at 0.5% which was in line with estimates. During the course of the day we are expecting the preliminary estimate of CPI from Germany, as well as CPI and GDP numbers for Spain. The USA is expected to release Personal Spending and Personal Income data which should give some insight into US consumer habits.

On Tuesday the focus locally will be on the Unemployment Rate data that StatsSA is expected to release. The number is not expected to improve from the previous recording of 27.7%. Japan is also expected to release Unemployment Rate data as well as Industrial Production and Household Spending data. Primary focus will be on the Bank of Japan which is expected to announce its interest rate decision. Estimates are that interest rates will remain unchanged. China is expected to release Manufacturing PMI and Non-Manufacturing PMI. During the course of the day are expecting CPI and GDP data from Japan, France, and the Eurozone. Canada is expected to release its GDP numbers that afternoon and from the USA we can expect the Chicago PMI and Consumer Confidence numbers.

Early on Wednesday morning New Zealand will also release its Unemployment Rate data. Japan is expected to release its Manufacturing PMI numbers whilst China is expected to release the Caixin Manufacturing PMI. Other markets that are expected to release Manufacturing PMI numbers include the United Kingdom, Canada and the USA. The USA is also expected to release the ADP Non-Farm Employment Change numbers which is usually a precursor to the Non-Farm Payrolls numbers expected on Friday. We can also expect the weekly US Crude Oil Inventories numbers towards the JSE close before attention shifts to the US Federal Reserve for their interest rate decision. The US Fed is expected to keep rates unchanged. Locally we are expecting the Barclays Manufacturing PMI and Naamsa Vehicle Sales numbers.

Thursday is another busy day in terms of economic data. Australia will kick off the day with the release of Trade Balance numbers. Focus shifts to the Eurozone that morning as we expect Manufacturing PMI numbers from Italy, France and Germany. The United Kingdom is expected to release Construction PMI numbers before attention shifts to the Bank of England’s interest rate decision and the press conference thereafter. From the USA we can expect the weekly Initial Jobless Claims numbers as well as preliminary estimates of Non-Farm Productivity and Unit Labour Costs.

This Friday is the first one in the new month therefore that means its jobs day. We expect the Non-Farm Payrolls from the USA this Friday. This number is one of the biggest indicators of the health of the US economy hence the reason for its significance. From the USA we are also expecting Unemployment Rate, Average Earnings, Trade Balance, Services PMI, ISM Non-Manufacturing PMI and Factory Orders data. There definitely isn’t a shortage of economic data therefore traders should look out for volatility in the US dollar. From China we are expecting the Caixin Services PMI data whilst Australia is expected to release its Retail Sales data.

Keep an eye out for trading updates and statements from JSE listed companies. It definitely looks set to be busy work in terms of economic data therefore expect more volatility than usual. Please maintain the necessary risk management tools when taking positions.

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!