In the loop
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 down this morning, and down by 10.9% year-to-date.
- The gold price is down this morning, and up by 8.5% year-to-date.
- 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:
- 10h00: Eurozone ECB publishes economic bulletin
- 14h30: US initial jobless claims (13 May)
- 16h00: US existing home sales (April), leading index (April)