U.S. Economic Calendar Key For Markets This Week; FOMC Meeting Likely 'Non-Event'
New York (July 28) The main drivers for markets this week will come from the U.S., with a heavy slate of economic news on the calendar, says Brown Brothers Harriman. “Rarely does the Federal Reserve Open Market Committee meet in the same week as the monthly jobs report,” BBH says. Other major reports include second quarter gross domestic product, the Employment Cost Index, auto sales and the Institute for Supply Management’s manufacturing survey. “Despite the active U.S. diary…the risk is we do not learn much new and that which we do learn is disappointing,” BBH says. “Given (Federal Reserve Chair Janet) Yellen's recent testimony before Congress and the absence of updated forecasts and a press conference, the FOMC meeting is likely to be a non-event. Minor tweaks in the statement and another $10 billion in tapering is expected. No more and no less.” Meanwhile, a sixth straight nonfarm payrolls report with a gain of over 200,000 jobs is widely expected, BBH continues. “Yet in the current context, this is not sufficient to change expectations,” BBH says. The firm says the biggest risk of disappointment for the markets comes from the GDP report. “Recent data warns that Q2 ended a dip in momentum,” BBH says. “Economists had thought that Q2 growth would more than offset the unexpectedly dramatic 2.9% contraction in Q1. It does not look like such a sure thing anymore. In addition, there will be benchmark revisions going back to the start of 1999 that will change the historical profile.” The FOMC is scheduled to meet Tuesday and Wednesday, and the jobs report and ISM survey are due out on Friday. GDP is slated for release Wednesday.
Mitsubishi: South African Platinum Output ‘Will Struggle To Grow In The Next 3-5 Years’
Monday July 28, 2014 8:26 AM
South African platinum producers are making efforts to resume production after a five-month strike that ended in late June but are also looking to divest some operations. The net impact is that output ultimately could “struggle to grow,” says Mitsubishi in a weekly metals report. “Signs that South African producers are slowly returning to normal following the strike emerged with Lonmin’s announcement that it expects to achieve 80% of normal output by the end of September, from the 30% level at present, and reach steady state output in the October-to-December quarter,” Mitsubishi says. “Anglo Platinum, meanwhile, confirmed its intention to sell its Rustenburg and Union mines, as well as the Pandora joint venture with Lonmin. If Amplats fails to find a buyer for its western limb assets, it may consider spinning them off as a separate company. It remains unclear as to what the long-term impact of these changes will be, but we believe the overall direction will be towards reduced output from the high-cost, low-margin western limb operations and that South African output will struggle to grow in the next 3-5 years.”