What to look forward to this trading week

A trade war is definitely underway between the US and China, and at the moment both sides seem eager to impose their will on the other side. Only time will tell who the eventual “winner” is going to be but until then, you can expect to see more volatility in the financial markets. We have seen wild swings in both US and South African equity indices in the past two weeks, and this trend should continue to prevail in the short-term. In terms of significant economic data this week will be relatively subdued but we are still anticipating significant volatility nonetheless. I have highlighted a few key events below that traders need to keep an eye on for this week.

Economic announcements detailed below:

• Current Account and Consumer Confidence data from Japan disappointed as they came in worse than expected early on Monday morning. German Trade Balance numbers also missed estimates as they decreased from the prior recorded level. Locally we are expecting South African Gross Reserves and Net Reserves numbers.

• On Tuesday Japan is expected to release its Machine Tool Orders data, whilst from China we are expecting New Loans data. In Europe, Italy and France are expected to release their Industrial Production numbers before attention shifts to the USA for the release of PPI and Wholesale Inventories data. Locally we are expecting Manufacturing Production data and the initial estimates are forecasting a contraction from the prior recorded number.

• Japan kicks off Wednesday with the release of PPI and Machinery Orders. China is expected to release its CPI and PPI numbers shortly thereafter. The United Kingdom will be in focus earlier on that morning as we expect the release of Manufacturing Production, Goods Trade Balance and Industrial Production data. ECB President Mario Draghi is expected to give a speech at 1pm that afternoon, and at 2.30pm we can expect CPI and Crude Oil Inventories data from the USA. Traders and investors will be keeping a close eye on the FOMC meeting minutes from the US Fed at 8pm, for fresh clues on the policy makers thinking particularly around the frequency of rate hikes in 2018.

• The Bank of Japan governor is expected to give a speech in the early hours of Thursday which might have some implication for Yen traders. Locally we are expecting Mining Production numbers as well as individual production numbers for Gold and Platinum. At 2.30pm the USA will be releasing the weekly Initial Jobless Claims numbers.

• On Friday China’s Trade Balance numbers will be in focus and the initial estimates are forecasting a decrease from the prior recorded level. Germany is expected to release its CPI numbers, and to cap off the week we are expecting Consumer sentiment and JOLTS Job Openings data.

The US dollar has continued to extend its gains against major currency pairs and as a result we have seen the Rand trading softer. We have seen big intra-day swings in the markets over the past week, and should Donald Trump continue to tweet or make announcements about US tariffs on China, this could very well persist. Traders are encouraged to maintain the necessary risk management procedures particularly on leveraged products as the losses could easily exceed the initial deposits.

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!