Market volatility has been elevated following last week’s shortened trading week. The US rate and inflation data battled it out with Greek negotiations in terms of most significant market catalysts in play.
Market volumes locally were elevated but largely as a result of this quarter’s futures close out which occurred on Thursday.
Last week’s top movers:
US Fed Chair Janet Yellen’s comments, at the Federal Open Market Committee (FOMC) meeting, assumed a dovish tone which equated to a weaker dollar and in turn an inflation hedge attraction to dollar-denominated gold. The uncertainty in Europe about the state of the eurozone’s future constituents, encouraged further safe haven buying of the precious metal and as a result, AngloGold Ashanti, the last gold miner amongst the top 40 ‘blue chip’ counters, takes top honour on the last week’s gainers list.
In a reversal of the fortunes evident over the last few weeks, Kumba Iron Ore has returned to the top decliners spot after achieving the top gainers spot previously. Three consecutive weeks of share price gains were followed by a share price decline of around 10%, after news that Chinese steelmakers are furthering production cuts, thereby reducing the demand for iron ore – the key ingredient in manufacturing steel.
The close of the past trading week also sees the reweighting of the Top 40 index. Capitec, Brait Se and MMI Holdings are set to replace Impala Platinum, Life HealthCare and Imperial Holdings within the blue chip index.
A look ahead
Following a breakdown in talks between Greek leaders and the International Monetary Fund (IMF), attention was then diverted to the Eurogroup meetings last Thursday in another ‘last ditch’ effort for Greece to secure bailout funding. This was to yield no result and in turn, more than €1 billion was withdrawn from Greek banks on the day. As a result, the European Central Bank called an emergency meeting to discuss an increase in liquidity to Greek banks.
Greece needs to pay €1.6 billion in bundled payments (deferred and current) by the June 30 2015. This week will see a continued focus on Greece trying to find common ground with the Troika in lure of the impending liquidity crunch and possible default to follow.
On Tuesday, flash manufacturing purchasing managers index data is scheduled for release out of China, France and Germany as well as the combined eurozone.
Wednesday will see the release of the final GDP estimate out of the US.
Back at home, current account data is scheduled for Tuesday while producer price index data is scheduled for Thursday.