The week ahead


The week ahead


Published Date: 2018-05-01 | Source: INCE|Community | Author: Chris Gilmour

The week ahead

Global geopolitical tensions cooled markedly last week with the historic meeting of the leaders of North and South Korea in Seoul, the first such meeting in the 65 years since the end of hostilities on the Korean Peninsula. While it is too early to become overly-enthusiastic about the potential outcome of this meeting, the fact that US President Donald Trump is scheduled to meet North Korean leader Kim Jong-Un in May further strengthens the view that meaningful progress will be made.

The Federal Open Market Committee (FOMC) meets this week in the US but no change to US interest rates seems likely. Expect another three rate hikes in the US as 2018 progresses though.

The UK's economic growth print of 0.1% for Q1 2018 was the weakest in over five years. While part of this weakness can be ascribed to unusually harsh winter weather, there were other more ominous signs that something more fundamental was at play. Sterling slumped on the news and the chances of an interest rate hike by the Bank of England in May receded markedly.

At the weekend it was revealed that Asda and Sainsbury, Britain's number two and three retailers by market share respectively, are planning to merge their operations. Sainsbury operates mainly in the south of the UK and targets the wealthier segment of the population, while Asda is mainly in the north and its target market is somewhat poorer. Asda has been owned by America's Wal*Mart since 1999 and has been a serial disappointment for the world's largest retailer. If the UK's competition authorities give this merger the green light-which is far from certain-Wal*Mart will likely take a minority stake in the combined listed entity (Sainsbury) and gradually reduce its stake over time. Wal*Mart has been retreating from Europe and other parts of the world for some time now, preferring to shore up its resources internally in the US to take on the increasing retail reach of Amazon.

Data Releases this week;

  • Mon 30 Aprril
    • SA Private Sector Credit Extension Mar
    • SA Trade balance Mar
  • Tue 01 May
    • SA Public Holiday-Workers Day
  • Wed 02 May
    • NAAMSA New vehicle Sales Apr
  • Thu 03 May
    • US FOMC Rates decision (Likely unchanged)
  • Fri 04 May
    • Standard Bank PMI Apr
    • US Nonfarm payrolls Apr (Consensus 185k)

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