What to look forward to this trading week

We have yet another shortened trading week on our hands but given the trends over the past few weeks, we can still expect some significant price action in the markets. With the recent historic meeting between the two Korean leaders, there could be a change in stance particularly from the USA towards North Korea. This has direct implications for the financial markets as this could provide an impetus for stable geopolitical relations. Locally, market direction is mainly being influenced by global factors particularly the USA, therefore traders need to keep an eye on US blue-chip corporate earnings being released. With that in mind below are a few key events that traders need to look out for this week.

• Chinese markets are closed on Monday however Manufacturing and Non-Manufacturing PMI data released this morning beat estimates, which is a good sign for one of the world’s largest economies. In Europe, German Retail Sales numbers disappointed as they contracted by 0.6%, missing the estimate of an increase 0.8% month-on-month. Later on in the afternoon we are expecting Personal Spending, Personal Income and Chicago PMI numbers from the USA. Locally, we are expecting Trade Balance numbers for March as well as Money Supply and Private Sector Credit data. In terms of big US earnings releases, McDonald’s and Allergan PLC are expected to release their results today.

• On Tuesday the big earnings releases to watch out from the USA are for Pfizer, Mondelez International, Gilead Sciences and Apple. US indices traders would do well to keep an eye out on those earnings as volatility is more than likely going to be high as the earning are released. From the USA you can also expect Construction Spending, ISM Manufacturing and Total Vehicle Sales data. Most of the world’s financial centres including South Africa will be closed for a holiday on Tuesday. The United Kingdom is expected to release Manufacturing PMI and Net Lending data. From Japan we are expecting Manufacturing PMI data for April.

• Trading will be back to normal at most trading centres on Wednesday, and to start the day we are expecting Unemployment Rate data from New Zealand. China is expected to release the Caixin Manufacturing PMI. We are also expecting Manufacturing PMI data from most of the countries in the Eurozone. The United Kingdom is expected to release Construction PMI data that same morning, followed shortly thereafter with the release of European GDP and Unemployment Rate data. The USA will be in focus for the remainder of the day as we anticipate the release of ADP Non-Farm Employment Change data and the weekly Crude Oil Inventories numbers. Most of the focus will be on the Fed for the interest rate decision as well as the FOMC statement shortly thereafter. In terms of major US earnings, the releases to watch out for are from Mastercard, Kraft Heinz and MetLife. Locally, we are expecting the release of the ABSA Manufacturing PMI data and the Naamsa Vehicle Sales numbers.

• On Thursday Australia is expected to release its Trade Balance numbers, before attention shifts to Europe later on that morning for the CPI estimates as well as Services PMI numbers from the United Kingdom. From the USA we can expect the weekly Initial Jobless Claims numbers as well as Non-Farm Productivity and Unit Labour Costs data. The US is also expected to release Trade Balance, Final Services, Factory Orders and the important ISM Non-Manufacturing PMI numbers. The only significant data expected locally is Electricity Consumption and Production data.

• Friday is jobs day as we expect the all-important Non-Farm Payrolls numbers out of the USA AT 2.30pm. The initial estimate is that the US economy is going to add 185 000 jobs in April. Along with this number we also expect the Average Hourly Earnings and Unemployment Rate data. Before the jobs data is released we are expecting Caixin  Services PMI numbers from China, as well as Services PMI numbers from most of the countries in Europe. Locally we are expecting the Standard Bank South Africa PMI numbers.

There is clearly no shortage of economic data despite the short trading week. Traders should maintain the necessary risk management procedures when taking positions as volatility will remain high.

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!