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Your Monday Wake Up Call 04 June 2018

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Musa Makoni
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What to look forward to this trading week

Donald Trump is looking to impose tariffs on steel and aluminium products from Canada, Europe and Mexico, and as can be expected this was not received well by its trade partners. It seems we might have a prolonged trade war between the US and its biggest trade partners which is likely going to have a negative impact on equity markets. The positive US jobs report on Friday is still shielding the impact on the markets for now but if a solution is not reached soon, we expect the markets to trend lower. Locally, we expect international trends and the Rand to be the primary catalyst for the All-Share index’s direction. Below I have highlighted the key events that traders need to look out for in this week’s trading.

 

  • Australia released its Retail Sales numbers earlier on this morning where the MoM number came in at 0.4% which was better than the forecasted 0.3%. The only other significant data expected for the day is Construction PMI numbers from the United Kingdom and PPI data from the Eurozone.

 

  • On Tuesday, South Africa is expected to release its GDP data for the 1st quarter and the initial estimates suggest that GDP annualized QoQ will contract by 0.5%. This is not good news for the South African economy which is struggling to grow consistently. We are also expecting the Standard Bank PMI data for May. On the international front, China is expected to release the Caixin Services PMI data, whilst in Australia we expect the interest rate decision from the Australian central bank. We are also expecting Services PMI numbers from most of the countries in the Eurozone as well as the USA. The USA is expected to also release the ISM Non-Manufacturing PMI numbers.

 

  • Wednesday will be relatively subdued in terms of economic data. To start off the day Australia is expected to release its GDP numbers and later on that afternoon we are expecting Trade Balance and Crude Oil Inventories numbers from the USA. Locally, we are expecting the SACCI Business Confidence numbers.

 

  • South Africa’s Manufacturing Production numbers will be in focus on Thursday, which should be important depending on the GDP data outcome on Tuesday. Internationally, the USA is expected to release the weekly Initial Jobless Claims numbers.

 

  • Japan is expected to release its GDP numbers on Friday morning but most of the attention will be on the Trade Balance numbers out of China. Later on that morning we are expecting Industrial Production numbers out of France and Germany, as well as Trade Balance numbers for Germany. To close off the week we are expecting Wholesale Inventories numbers out of the USA.

 

Jitters about Italy seem to have subsided for the time being. The summit between the USA and South Korea is imminent therefore we might need to keep an eye on Donald Trump’s twitter feed as he has proved to be unpredictable.

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?

 

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