In the loop 18 May 2023

In the loop

Shireen Darmalingam

What you should know this morning:

The rand is weaker this morning, at R19.30/$, after closing weaker yesterday (R19.23/$*).
EM currencies were mixed yesterday; the CLP (+0.7%), RUB (+0.5%) and COP (+0.5%) were the biggest gainers; the THB (-0.9%), PLN (-0.8%) and ZAR (-0.8%) were the biggest losers.
Asian equity markets the Nikkei, Hang Seng and Shanghai Composite are up.

Both US President Joe Biden and House Speaker Kevin McCarthy have expressed confidence that a deal on raising the US debt ceiling will be reached this week.
Meanwhile, top officials are trying to highlight the danger to the economic and financial outlook of any failure to address the debt limit.

The US existing home sales data for April is due for release today.
Sales are likely to have declined by 3.2% m/m in April, after having declined by 2.4% m/m in March.
This comes as the resale market continues to struggle due to lack of inventory and affordability challenges.
Existing homeowners who locked in cheaper mortgage rates are reluctant to list their homes.

The ECB will publish its Economic Bulletin today.
ECB Vice President Luis de Guindos commented yesterday that the central bank has completed most of its tightening but there's still "a way to go”.
He added that future decisions will hinge on the data released in the coming months.

Japan’s trade deficit narrowed for a third consecutive month in April, to JPY432bn, from a revised JPY755bn in March.
Japan’s imports fell for the first time in more than two years in April as commodity prices softened.
Imports fell by 2.3% y/y in April, led by a decline in crude oil and liquid natural gas shipments.
The decline in imports reflects that the impact from the Russia-Ukraine war on energy costs has lessened over time, following its record price surge last year.
Exports were up 2.6% y/y in April, driven largely by car shipments during the month.
Export growth was the weakest in more than two years as China-bound shipments slumped amid concerns about faltering global economic demand.

Locally, there are no major economic data scheduled for release today.
Eskom: Stage 4 loadshedding is currently in place until 4pm; Stage 6 will be implemented then until 5am tomorrow.

Brent crude oil is currently at $76.55/bbl; ($76.96/bbl*).
Gold is at $1978/oz ($1983/oz*).
SA CDS 329bps*, Brazil 224bps* and Turkey 679bps*.
Yields: US 10yr at 3.56%*, German bund at 2.33%* and SA 10-year generic at 11.84%*, SA’s R2030 at 11.00%*.

* Denotes yesterday’s close.

Key events and data:

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