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In the markets: What to watch this week

Mar 20 2017 06:49
Giacomo Bonavera

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

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With the rand strengthening significantly in the wake of the US Federal Reserve’s interest rate hike, we take a look at South Africa’s main economic indicators and compare them to those of other developing nations.

But before we go into that, there is important data regarding current account of SA to be released on Wednesday.

SA recorded a current account deficit of nearly R175.8bn in the third quarter of 2016, which is 37.55% higher than the all-time low recorded in the third quarter of 2013, but considering that there hasn’t been a trade surplus since 2003, no one is celebrating.

Forecasts indicate we should have an improvement.

Also on Wednesday is the release of local inflation data, which is expected to continue improving as our import-reliant economy benefits from the higher purchasing power of the stronger rand.

January 2017 inflation data shows that consumer prices increased by 6.6% and is likely to drop to around 6.4%, slightly above the 3% to 6% inflation rate target set by the South African Reserve Bank.

Other important economic announcements due this week:

Monday

• Eurogroup Meeting

Tuesday

• US President Trump speaks
• UK Consumer Price Index (CPI)

Wednesday

• US Oil Inventories & Existing Home Sales

Thursday

• EU GfK Consumer Confidence
• UK Retail Sales
• US Unemployment Claims, New Home Sales and Yellen speaks

Friday

• EU Flash Manufacturing Purchasing Managers’ Index (PMI)
• US Core Durable Goods Orders

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

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