The Week Ahead with Leigh Riley 9 May 2016

A turbulent week last week in global markets as weaker than expected Chinese PMI numbers ignited a sell off in global markets, followed by the UK whom followed suit. The USA rounded off the trading week with lower non farm payroll numbers, adding 160000 workers to their payroll, below the expected 200 000 and the least in over seven months with gains in professional and business services, healthcare and financial activities with mining continuing to decline. Unemployment remained at 5% with the average hourly earnings for all employees on private nonfarm payrolls increasing by 8cents to $25.53. Average hourly earnings have increased by 2.5% in the year. Hawkish commentary from the Feds Dennis Lockhart served to drive dollar strength in the previous week, inversely commodity prices fell with iron ore being the worst effected. Emerging markets were hit hard by the renewed strength in the greenback and the Rand gave up over 4% from Monday through Friday, signalling the weakest levels in almost a month. In local economic data South Africa seemed to fair better than its offshore counterparts as both PMI and business confidence beat estimates at 54.90 and 82.5 respectively. Looking forward at the week ahead in economic releases and we have already had Chinese trade balance data out, signalling a 10.9% drop in imports in April. We now look forward to data on local gold and forex reserves, manufacturing production from the UK along with US crude oil inventories on Wednesday. A slurry of economic data from the UK on Thursday with a speach from Bank of England Governor Mark Carney with US unemployment claims later on the same day. The rest of the week sees Germany preliminary quarter on quarter GDP numbers with retail sales and consumer sentiment from the USA and finally Chinese Industrial Production to finish off the week on Saturday. In corporate news Old Mutual last week noted a gross sales increase of 17% for the first quarter with funds under management climbing by 3%. Toger Brands expects earnings per share to increase between 23% and 28% in the interim reporting period. Rhodes Food Group in its trading statement guided toward an increase in earnings per share between 85% and 90%. Finally Barclays Plc placed more than 100 million shares in a sale of its Barclays Africa Group, reducing its holding to 50.1%. Sappi reported profit of $100m dollars, almost doubling that of the second quarter for 2015, the share now trading over 13% up on the day. AngloGold in its Q1 update had all sustaining costs of $860/oz with free cash flow of $70m with net debt of $2.127bn. Finally, looking at the rest of the week, PSG is ex-div today and we have earnings releases from Life Healthcare, Datatec, Reunert, a traidng update from Mondi, Reunert, Liberty Holdings and Oceana. https://www.ig.com/za/igplayer