What to look forward to this trading week

Tariffs, tariffs and more tariffs. President Donald Trump is laying down the hammer particularly on imports from China and as a result this has sent jitters into global equity markets. The target is mainly steel and aluminium products but nonetheless the impact is very significant for the global equity markets. Locally we were relieved following the announcement that Moody’s would not be downgrading South Africa’s sovereign rating further in junk. A downgrade would have triggered a sell-off of local bonds and more than likely the Rand would have come under pressure against major currency pairs. It’s brand new trading week albeit short as the Easter holiday starts on Friday. I have highlighted a few key events below that traders need to look out in this week of trading.

This weeks economic announcements are detailed below...

• Monday will be relatively subdued in terms of economic data, and we are not expecting any earnings releases locally. The only event to look out for is two speeches by US FOMC members after the JSE close.

• On Tuesday Capitec Holdings is expected to release its annual earnings results, and in light of the most recent claims by Viceroy Research, the market will be watching these results closely. We are also expecting local readings for the change in Non-Farm Payrolls for the 4^th quarter. On the international front we are expecting CPI data for Japan and Spain, and from the USA we are expecting Consumer Confidence data.

• On Wednesday major focus will be on the SARB which is expected to announce its interest rate decision. Given the most recent reading of inflation, most analysts are forecasting a rate cut of at least 25 basis points from the SARB. On the same day we are expecting earnings results from EOH Holdings which has been trading under significant pressure in the past two weeks. Globally, market participants will be watching in anticipation of the final reading of US GDP data, as well as Goods Trade Balance, Wholesale Inventories, Pending Home Sales and Crude Oil Inventories.

• Thursday will be the last day of trading for most global equity markets ahead of the Easter holiday. Key data is expected out of the United Kingdom, namely Current Account and Final GDP data. From the USA we are expecting the weekly Initial Jobless Claims, as well as Personal Spending and Personal Income data. Locally we are expecting PPI data from StatsSA, and we are also expecting Trade Balance numbers.

• On Friday the JSE will be closed for the Easter holiday along with most global markets. However we still expect CPI, Unemployment Rate and Industrial Production data from Japan.

Donald Trump’s tariffs will continue to be the main discussion of the week. We have already seen the US dollar weaken as a result so I encourage traders to keep an eye on the US dollar index as that will have an impact on the Rand as well as other global currencies. Global sentiment continues to have a big impact on the JSE’s direction therefore do keep an eye out on the movements in US and Asian equity indices.