SOUTH AFRICA
SA GDP
- Economists see SA avoiding second-quarter contraction
- Better-than-expected mining and manufacturing output contributed to their revised projections.
- SA economy probably avoided a contraction in the second quarter, despite record power cuts, logistical constraints and sagging consumer confidence.
- Analysts polled by Bloomberg August 4-10, the economy stagnated quarter-on-quarter, compared with a forecast for a 0.1% contraction last month.
- Better-than-expected mining and manufacturing output contributed to their revised projections.
- The sectors that make up more than a fifth of total gross domestic product grew 1.5% and 2.3% respectively in the three months through June. Source Moneyweb
SA INTERNET DISRUPTION
- Two undersea communication cables that are critical for network operators in South Africa snapped on the same day, which has resulted in disruptions to the internet.
- Some websites might load slowly, and others not at all.
- The West Africa Cable System (WACS) and the South Atlantic Telecommunications Cable number three (SAT-3) both broke on 6 August.
- Technicians citing that in the Congo Canyon, a repeated rockfall responsible.
- Openserve confirmed that the break in the cables occurred, and said that a consortium of partners is working to restore these cables. Source News24
GLOBAL MARKETS
Stocks
Equities flat ahead of Fed minutes on Wednesday.
- US stock futures reversed early losses to trade in the green on Monday,
- with contracts on the Dow Jones adding about 70 points while the S&P 500 gained 0.3% and the Nasdaq 100 was up nearly 0.5%.
- Stocks attempt to rebound from losses last week, with shares of Apple, Microsoft.
- Meanwhile, traders continue to follow developments in China after turmoil and default risks at developer Country Garden and wealth manager Zhongzhi Enterprise Group.
- Investors will also keep a close eye on retailers’ earnings this week, including Home Depot and Walmart.
- The FOMC minutes on Wednesday, as well as July retail sales data will also be in the spotlight.
Bonds
Yields higher after US PPI and Treasury auctions.
- The yield on the US 10-year Treasury note rose above the 4.13% mark, approaching the nine-month high of 4.19% touched on August 3rd.
- New economic data pushed back against previous hopes of disinflation in the US economy,
- The data supporting the case for restrictive monetary policy and trimming demand for Treasuries in the secondary market.
- Both headline and core producer prices were above market expectations in July, slightly backtracking the cooler CPI reading released on the prior day.
- Additionally, higher bond issuance from the US government also contributed to higher yields,
- with auctions for 10-year notes and 30-year bonds both seeing higher yields than previous results. Source CNBC
OVERNIGHT HEADLINES
Market Closes:
- DOW +105 to 35,281
- SP500 -4.78 to 4,464 4,468
- NASDAQ flat at 13,644
 image: Trading economics
Asian markets
- Asian equities lower.
- In Japan equities lower. The Nikkei 225 Index dropped 1.27% to close at 32,060, erasing gains from the previous session as property woes in China.
- A strong US producer inflation report hurt sentiment globally.
- Investors also braced for Japan’s second quarter gross domestic product report on Tuesday, as well as its key inflation print on Friday.
- Meanwhile, traders monitored the yen closely after it hit the psychologically important ¥145 per dollar level that prompted Japanese authorities to intervene in the currency markets last year.
- In Australia, the ASX 200 index fell 0.89% to 7,277 on Monday, closing at its lowest level in a month and taking cues from a negative lead on Wall Street.
- Traders citing persistent inflationary pressures in the US raised concerns that the Federal Reserve will keep interest rates higher for longer.
- Property sector woes in China and geopolitical risks in Europe also dampened investor sentiment. Source : Reuters
Energy
Oil prices remain bid on more supply cut news.
- Brent crude futures eased toward $86/bl on Monday after rallying for seven straight weeks on tightening global supply.
- China-related uncertainties and a stronger dollar weighed.
- Investors continued to fret about a sluggish economic recovery in top crude importer China, while awaiting industrial production, retail sales and employment data on Tuesday.
- A stronger-than-expected US PPI report also fuelled bets that the FED will keep interest rates higher for longer, pushing the dollar up while pressuring dollar-denominated commodities.
- Meanwhile, brent prices surged nearly 20% over the past seven weeks as OPEC+ majors Saudi Arabia and Russia curtailed supply. Source Gulf news
Metals
Precious metals lower after spike in US yields.
- Gold held below $1,920/oz on Monday, trading at five-week lows and facing pressure from a strong dollar and Treasury yields.
- Hotter-than-expected US producer inflation report for July fuelled bets that the Federal Reserve will keep interest rates higher for longer.
- Investors also brace for US retail sales figures and minutes of the Fed’s last policy meeting this week that could guide the economic and interest rate outlook.
- Elsewhere, Japan will release second quarter GDP figures on Tuesday, while China will report industrial production, retail sales and employment numbers on Wednesday. Source: Kitco
Currencies
Dollar higher as strong US PPI data.
- The dollar index rose toward 103 on Monday, scaling its highest levels in five weeks.
- A stronger-than-expected US producer inflation report for July fuelled bets that the Federal Reserve will keep interest rates higher for longer.
- San Francisco Fed President Mary Daly said the latest CPI numbers do not mean that the central bank can declare a win over inflation, adding that the labour market is not yet balanced.
- Investors now look ahead to earnings reports from Walmart, Home Depot and Target, as well as July retail sales data for insights on the state of American consumers.
- The dollar strengthened across the board and climbed to multi-month highs against the yen, Aussie and Kiwi Dollar.
- Source : Fx news
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