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Your Monday Wake Up Call 02 July 2018

Musa Makoni

What to look forward to this trading week

We are officially in the second half of the year and it has been rough year for the JSE so far. The trade war between the USA and its trade partners has had an adverse impact for the JSE as stocks largely continue to trade under pressure. Weaker metal commodity prices are making mining stocks less attractive and the hike in US rates has seen significant outflows out of emerging markets. Focusing on the near term, this week is important as we expect the Non-Farm Payrolls data out of the USA. A good set of numbers will increase the odds for another rate hike for the USA, which will spell more bad news for emerging markets. I have highlighted a few key events that traders need to look out for in this week’s trading.


  • Manufacturing PMI data will be in focus on Monday as we expect such data from the major global financial centres, particularly the United Kingdom and the USA. From the Eurozone we are expecting PPI and Unemployment Rate data. Locally we are expecting the Naamsa Vehicle Sales numbers for June.


  • Early on Tuesday morning we are expecting the interest rate decision out of Australia and the forecast is that the Reserve Bank of Australia will keep rates unchanged. The United Kingdom is expected to release Construction PMI at 10.30am that morning, and later on that afternoon the USA is expected to release its Factory Orders numbers. The Eurozone is expected to release its Retail Sales numbers at 11.00am.


  • Australia is releasing its Retail Sales and Trade Balance numbers early on Wednesday morning before attention shifts to China for Caixin Services PMI numbers. We also expect Services PMI numbers from countries in the Eurozone including the United Kingdom. The USA will be closed for Independence Day celebrations.


  • At 8am on Thursday we are expecting German Factory Orders numbers for the month of June. More attention will be on data out of the USA starting from 2.15pm where we are expecting the ADP Non-Farm Employment numbers. We are also expecting the weekly Crude Oil Inventories and Initial Jobless Claims, as well as the Final Services and ISM Non-Manufacturing PMI numbers. The US Fed FOMC meeting minutes are expected to be released at 8pm that evening.  Locally, we are expecting electricity consumption and production data.


  • On Friday morning Japan is expected to release its Household Spending and Average Cash Earnings data. Later that morning we are expecting Italian Retail Sales numbers and German Industrial Production numbers. At 2.30pm the all-important Non-Farm Payrolls numbers out the USA will be released along with Unemployment Rate and Average Hourly Earnings data. Locally, the reserve bank is expected to release Gross and Net Reserves numbers for South Africa which should conclude the trading week.


Emerging market sentiment will continue to determine market moves on the JSE the short-term. In that regard, traders might want to keep a lookout on the MSCI Emerging Markets Index which tracks markets in 24 emerging markets including the South Africa.


We will be keeping tabs on the events in the markets. Check out our blog for market updates, insights from our team, and our independent analysts. Not sure about a trade?


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