The Week Ahead

16 July - 20 July

Global equity markets

Local data

Mining production decreased by 2,6% year-on-year in May 2018. The largest negative contributions to the figure were recorded for gold, coal, manganese ore and platinum group metals (PGMs)

Seasonally adjusted mining production increased by 5,0% in May 2018 compared with April 2018.

Manufacturing production increased by 2,3% in May 2018 compared with May 2017. The largest contributions were made by the food and beverages, petroleum, chemicals, rubber and plastic products and motor vehicles, parts and accessories divisions. 

International data

Following on from the US implementation of new tariffs on $34bn worth of Chinese imports last Friday, the Trump administration has threatened more tariffs on another $200bn in Chinese imports. US President has said earlier on in the month that ultimately, here could be tariffs imposed on over $500bn in Chinese goods. While China has vowed a retaliation to the US tariffs imposed, they have also shown some diplomacy in encouraging a resumption in dialogue relating to the trade “war”. The suggestion has seen some risk appetite returning to markets.

US markets will now find further direction from the new earnings reporting season which has commenced this week.

In the UK, Prime Minister Theresa May has seen a number of “Brexit” ministers resigning from their posts, most notably the Brexit Minister, David Davis, and the Foreign Secretary, Boris Johnson. The resignations are said to be statements against what they are deeming as a soft Brexit approach by the Prime Minister. A white paper on the UK’s Brexit proposal has now been submitted to the European Union Commission.

Economic Calendar

Date Time Currency Event Previous
16 July 04:30 CNY GDP q/y 6.80%
16 July 14:30 USD Core Retail Sales m/m 0.90%
16 July 14:30 USD Retail Sales m/m 0.80%
17 July 10:30 GBP Average Earnings Index 3m/y 2.50%
18 July 10:00 ZAR CPI y/y 4.40%
18 July 10:30 GBP CPI y/y 2.40%
18 July 13:00 ZAR Retail Sales y/y 0.50%
18 July 14:30 USD Building Permits 1.30M
18 July 16:30 USD Crude Oil Inventories -12.6m
19 July 10:30 GBP Retail Sales m/m 1.30%
19 July 15:00 ZAR Sarb Rates Decision  

Source:  Economic Calendar, as of 13/07/2018

Commodities

Oil prices have been under immense pressure this week, despite a much higher than expected draw from inventories by US commercial firms being reported. The decline in oil follows news that Libya would reopen ports after supply disruptions. This has coupled with the suggestion that Iran will manage to export crude exports despite the US sanctions. The US secretary of State has said that the US would consider providing some waivers to buyers of Iranian crude.

The Rand

The rand, has been gaining ground against its developed market peers this week. Suggestions from China that they are willing to engage in renewed dialogue with the US on trade has seen emerging market assets find favour in the short term.

The British Pound has been particularly soft over the week, as Teresa May’s government finds a plethora of resignations amidst the suggestion of the soft approach to Brexit negotiations.

While the rand is finding short term strength along with its emerging market currency peers, the longer term trend does still appear to favour further weakening to come.

Companies

Pan African Resources Plc: released a FY18 operational update, guiding that gold production was 160,421.00oz more than its previous guidance.

Steinhoff International Holdings NV: has launched a consent process for a lock-up agreement in connection with the restructuring of the financial indebtedness of the Company, SEAG, Finance Holding and Stripes US Holding Incorporated.

Tsogo Sun Holdings has entered into a sale of shares and subscription agreement with Hospitality Property Fund Limited and its wholly-owned subsidiary Merway Fifth Investments Proprietary Limited for the disposal by the  sellers to Hospitality of a portfolio of seven mixed-use casino precinct properties for an aggregate purchase consideration of R23 billion.

18 July The Foschini Group Ex Dividend 745c
18 July The Lewis Group Ex-Dividend 200c
19 July Anglo American Platinum Q2 Production Update

 

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