Economic week ahead: SA shows rise in retail sales
South Africa is set to provide updates on manufacturing output and retail sales over the coming days. Egypt is to report last month’s inflation data while we look to Ghana to announce a rates decision.
Overseas, economists and investors will keep on the lookout for US retail sales figures, European growth updates and a slew of data from China. The International Energy Agency will publish its World Energy Outlook 2014 and the Organisation of Petroleum Exporting Countries (OPEC) will publish the group’s monthly oil market report.
The South African Chamber of Commerce and Industry (Sacci)’s October trade conditions survey and Statistics South Africa (StatsSA)’s September manufacturing numbers should kick-off South Africa’s economic week on Tuesday. Manufacturing output fell by 1.2% from a year earlier in August, but may have rebounded to around 5.0% growth in September.
The spotlight is likely to shift to South Africa’s September retail sales report on Wednesday followed by wholesale trade, mining and motor trade numbers on Thursday. Analysts at 4CAST expect Wednesday’s retail figures to show a 3.3% year on year rise, which is an improvement on August’s lower than expected 2.1% climb.
Beyond these specific releases, analysts will keep a watchful eye on the rand’s exchange rate over the coming days in the run-up to next week’s monetary policy meeting at the South African Reserve Bank. Further weaknesses in the currency – following rating agency, Moody’s decision to downgrade South Africa’s rating last week – could send the rand to five-year lows.
Elsewhere in Africa this week, Egypt is billed to report October’s inflation data on Monday. Ghana’s consumer price index (CPI) will follow on Wednesday along with the central bank’s announcement of November’s policy decisions. Ghana’s benchmark rate currently stands at 19.0% but, with inflation on the rise. A hike cannot be ruled out at this week’s meeting, despite weakening growth.
American markets will be closed on Tuesday in observance of Veterans Day. The country’s data calendar on either side of the holiday is particularly light this week.
First up, on Wednesday, the National Federation of Independent Businesses (NFIB)’s latest small business optimism index may show a slight rise to 96.0 for October from 95.3 in September.
Consensus is that wholesale inventories data – also due for release on Wednesday – will post a 0.2% monthly rise for September, down from a 0.7% increase in August. Activity at the wholesale level can foreshadow consumer trends, so this release is closely followed.
On Thursday, weekly initial jobless claims may rise slightly from a 14-year low, to 280 000 filings in the week ended November 8 from 278 000 in the week to November 1.
September’s job openings and labour turnover survey (JOLTS) report – also slated for release on Thursday – may show that there were 4.8-million job openings in the world’s largest economy on the last business day of September, a slight decline from the 4.835-million recorded as of August 29.
The week’s biggest release – last month’s retail sales report – will follow on Friday. Government figures are likely to show that consumer purchases rose 0.2%, an improvement on the previous month’s 0.3% decline.
Also on Friday, the Reuter’s/University of Michigan consumer sentiment index may continue its recovery-best performance – possibly rising to 87.5 from 86.9 in October – and business inventories may show a 0.3% rise for September following a 0.2% rise in August.
Europe’s economic week will begin on Monday with the latest euro zone Sentix investment sentiment survey results. The Sentix gauge fell to -13.7 in October from -9.8 in September. Analysts at 4CAST expect a further slip, to a reading of -15.0, this week.
On Wednesday, the Bank of England’s quarterly inflation report – including the central bank’s updated inflation and macro-economic growth forecasts – will take centre stage. Governor Mark Carney will hold a press conference following the report’s release.
Also on Wednesday, the euro zone’s latest industrial production data may show that output fell by 0.3% in the year to September, an improvement on August’s 1.9% year on year decline. On a monthly basis, production may have edged up 0.7%.
Closing out the week on Friday, Eurostat – the European Union’s (EU) statistics office – will publish the euro zone’s October inflation and third quarter growth figures. Markets expect the currency bloc’s harmonized index of consumer prices (HICP) to have risen 0.4% last month from a year earlier. Economists surveyed by Bloomberg in October expect Eurostat’s first estimate of gross domestic product (GDP) to show 0.2% growth for the three months to September.
Beyond Friday’s regional data, economists and investors will pay close attention to preliminary GDP figures for Germany and France – the euro zone’s two largest component economies – on Friday. Analysts expect Germany to post 0.1% growth, quarter on quarter. France may post 0.2% growth on the same basis.
China – the world’s number two economy – released key inflation data on Monday. In line with market expectations, the country’s consumer price index (CPI) rose 1.6% from a year earlier in October. Prices at the factory gate – as measured by the producer price index (PPI) – fell by 2.2%, year on year, in October.
China is also scheduled to report its broadest measure of new credit, aggregate financing, along with money supply and new yuan loans sometime between Monday and Friday. Aggregate financing and new lending are expected to have declined further in October. Money supply growth may have remained unchanged at 12.9%.
Later this week, China will report industrial production, retail sales and urban fixed investment data. Thursday’s releases are likely to show that, year on year, industrial output rose by around 8.0% and retail sales by 11.6%. Year to date, urban fixed investment likely climbed 16.1% through October.
Beyond this data, economists and investors will be keeping an eye out for news from several high profile meetings in Asia this week. Leaders from the 21-member nations of the Asia-Pacific Economic Cooperation (APEC) forum – including the United States and China – will gather in Beijing on Monday for the group’s annual meeting.
On Wednesday, leaders from the 10-member nations of the Association of South East Asian Nations (Asean) – again including the US and China, along with Japan and India – will begin a two-day meeting in Myanmar.
The last of the region’s high-profile gatherings will occur at the weekend as leaders from the Group of 20 (G20) countries head to Australia for two-days. The state of the global economy and ways to boost growth will dominate the discussions.