finweek

In the markets: What to watch this week

Giacomo Bonavera is head of foreign exchange trading at Capilis Asset Managers.
Giacomo Bonavera is head of foreign exchange trading at Capilis Asset Managers.

Although a lot of political noise is priced into the rand at the moment, expect further volatility from any news surrounding political developments in the country.

The rand weakened around 2% against the dollar last week, breaking through the R14.40 resistance level and touching R13.70, before settling at around R13.60. 

Market participants are paying particular attention to economic data being released this week as it includes the effects of the Cabinet reshuffle and resulting impact this had on financial market.

Data to be released over the next five days includes foreign exchange reserves later today, and the unemployment figures for the end of the first quarter of 2017 on Tuesday.

Unemployment dropped from 27.1% compared to 26.5% in the fourth quarter of 2016. During this quarter, the labour force grew by 143 000 people, bringing the participation up to 59.2%, coming within sight of the highest rate on record 60.8%.

However, unemployment figures for the first quarter are widely expected to come in at 27.4% tomorrow.

On Thursday, mining production figures, as well as manufacturing production figures, will be released. 

Other important economic data to be released this week includes:

Monday

• China Trade Balance

Tuesday

• EU German Balance of Trade

Wednesday
• China Inflation Rate
• US Monthly Budget Statement

Thursday

• UK Balance of Trade, Production and Monetary Policy Decision
• US Unemployment and Producer Price Index figures

Friday

• G7 Meetings
• EU German GDP Growth
• US Consumer Price Index, Retail Sales and Prelim Consumer Sentiment

Giacomo Bonavera is head of foreign exchange trading at Capilis Asset Managers. Click here to visit the firm’s website. 
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