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Your Monday Wake Up Call 09 July 2018

Musa Makoni

What to look forward to this trading week

Following last week’s buzz surrounding Non-Farm Payrolls and the implementation of tariffs on Chinese goods by the USA, we expect this week to be much more subdued. Since Friday we have seen markets pick up following consecutive weeks of significant pressure. There will be longer term impacts for the financial markets but at least it seems as if the short-term impact has been priced in already. Locally, market moves are predominantly being determined by the rand and over the past week it has gained marginally against the US dollar. That should remain the case for the short-term until JSE blue-chips start reporting the earnings results. In this note I have highlighted some key events that traders need to look out for during this trading week.


  • Early on Monday morning German Trade Balance numbers came out in line with market expectations at 20.3 billion. Japan’s Current Account numbers also beat market expectations. Other than that Monday will be very subdued and we are not expecting any data or earnings locally.


  • China is expected to release its CPI and PPI readings early on Tuesday morning whilst from Japan we are expecting the Machine Tool Orders numbers. Italy and the United Kingdom are expected to release their Industrial Production numbers at 10am and 10.30am respectively. More focus will be on the United Kingdom for the release of GDP, Manufacturing Production and Goods Trade Balance data. Locally, we are expecting the SACCI Business Confidence numbers for June.


  • Japan is expected to release Core Machinery Orders and PPI data on Wednesday morning. ECB President, Mario Draghi is expected to make a speech at 9am that morning which could result in some high volatility for the Euro currency. The USA will release its PPI data at 2.30pm and at 4pm we are expecting the interest rate decision from Canada. The forecast for the Canadian rate decision is a rate hike of 25 basis points. The USA is expected to release its Wholesale Inventories data at that same time and at 4.30pm we are expecting the weekly Crude Oil Inventories data.


  • Thursday kicks off with CPI data out of Germany and France, and at 11am we expect Industrial Production numbers for the Eurozone. At 1.30pm we are expecting the ECB Monetary Policy meeting minutes which will see a reaction in the Euro. The USA will release its CPI numbers at 2.30pm as well as the weekly Initial Jobless Claims. For South Africa we are expecting the release of Mining Production data including the individual Gold and Platinum production numbers.


  • Chinese Trade Balance numbers will be released early on Friday morning which should set the tone for Asian markets trading on that day. Japan is expected to release its Industrial Production numbers and initial forecast suggest a 0.2% contraction. US banks, JP Morgan Chase, Citigroup and Wells Fargo are expected to release their earnings results pre-market. Locally we are not expecting any earnings or economic data releases.


Metal commodity prices have somewhat recovered but whether this will be enough to lift JSE listed miners will depend on the strength of the rand. Market moves will continue to centre around the trade war between the US and its trade partners in the short-term but do keep a look out for other factors such as the US dollar and movements in domestic and international bond markets.

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? Call the Trading Desk on 087 940 6102, and bounce your idea off one of our dedicated traders.

Until next week, we wish you profitable trading!


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