Economic week ahead: SA mining and manufacturing updates

The Bank of England’s July rates decision, a trade report from China and the minutes from the Federal Reserve’s June policy meeting are the big items elsewhere in the world. Here is your guide to key data, meetings and other events expected over the coming days.

Africa
South Africa’s data week begins on Monday with Absa’s June house price indices and the South African Reserve Bank’s report of last month’s gross and net reserve levels. Analysts at 4CAST expect gross reserves to have climbed by around $250-million from May’s $49.2-billion total.

As the week rolls on, the South African Chamber of Commerce and Industry (Sacci) will release last month’s business confidence index (BCI) readings on Tuesday and Statistics South Africa (StatsSA) will report May’s mining and manufacturing data on Thursday.

StatsSA’s data showed that manufacturing production increased by 3.5%, month-on-month, in April. Subsequently released forward-looking purchasing managers’ index (PMI) readings suggest that industry’s performance in May and June was more lacklustre. 

Figures released last week showed that the second quarter’s average PMI reading was 46.1, well below the 50-mark separating expansion from contraction.

Elsewhere on the continent, a series of inflation updates will dominate. Mauritius will report June’s consumer price index (CPI) on Monday. Ghana and Egypt will follow on Wednesday and Thursday, respectively. Reports from Senegal and Angola are also possible this week.

Aside from these inflation snapshots, economists and investors will be on the lookout for May’s money supply data from Uganda and Tanzania and Egypt’s report of June’s gross reserves over the coming days. Senegal’s first quarter gross domestic product (GDP) report may also be released this week or next.

United States
The National Federation of Independent Businesses (NFIB) will report last month’s small business optimism index readings on Tuesday.

The index rose sharply for the second consecutive month in May to its highest level since September 2007. Consensus is that the sentiment gauge rose further in June, providing another piece of evidence that the world’s largest economy improved significantly in the second quarter following an extremely disappointing performance in the first three months of 2014.

On Wednesday, economists and investors will turn their attention to the minutes of the Federal Reserve’s latest policy meeting. Officials downgraded their growth projections for the US economy in 2014 following their June meeting, but continued with their gradual but steady reduction of stimulus. Markets will be looking for evidence that the central bank remains optimistic on growth.

On Thursday, weekly initial jobless claims figures may show that 315 000 Americans filed for first-time benefits during the week ended July 5, the same number as the previous week. A report last week showed that the share of Americans with a job reached its highest level since August 2009 in June.

Closing out the week, US Treasury budget figures will likely show a surplus of around $80-billion in June following a $130-billion deficit in May. Rising tax receipts, coupled with spending cuts, have trimmed the US’ overall debt this fiscal year. Eight months into the fiscal year, debt is down by 30% from last year.  

Europe
Germany’s latest industrial production data are the first of many European output reports due over the coming days. Economists expect Monday’s release to show that production in Europe’s largest economy rose 0.2% on a monthly basis and 3.8% on an annual basis in May. Data from the Czech Republic, Spain and Norway will follow throughout the day.

On Tuesday, more German data is likely to show that the country’s current account surplus – a source of tension between Germany and its euro zone neighbours, among others – narrowed to €14.5-billion in May from €18.4-billion in April. A separate report may show that the country’s trade surplus also shrank, to €16.0-billlion from €17.4-billlion previously.

British production figures, also due out on Tuesday, are expected to show that, on a monthly basis, industrial output edged up 0.2% and manufacturing production rose 0.4% in May.

On Thursday, France and Italy will report industrial production data and the Bank of England’s monetary policy committee will meet to consider interest rates. According to a poll taken last week by Reuters, the median forecast of the 60-economists surveyed expects no change in rates this year. Most analysts expect a 25-basis point hike from the central bank in the first three-months of next year.

Asia
China – the world’s number two economy – will release last month’s consumer and producer inflation snapshots on Wednesday. Economists expect the country’s consumer price index (CPI) to have risen 2.4% from a year earlier and the producer price index (PPI) to have fallen 1.0% over the same period.

On Thursday, India’s new government will present its budget for the upcoming fiscal year. Central banks in South Korea, Malaysia and Indonesia will announce July rates decisions. And China and India will release June’s trade data. China will also report money supply and new yuan lending tallies.

Elsewhere in the region, Indonesia may report preliminary results from the country’s presidential election as early as Thursday. Polls place reformist Jakarta Governor Joko Widodo ahead of former General Prabowo Subianto, a former special forces officer and son-in-law of deceased dictator Suharto. The victor will inherit a large current account deficit and slowing growth.

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