In the loop
What you should know this morning:
- The rand is stronger this morning, at R18.95/$, after closing weaker on Friday (R19.00/$*).
- EM currencies were mixed on Friday; the CLP (+0.5%), HUF (+0.3%) and BRL (+0.1%) were the biggest gainers; the RUB (-0.3%), TRY (-0.2%) and INR (-0.2%) were the biggest losers.
- Asian equity markets are mixed this morning; the Nikkei and Shanghai Composite are up, while the Hang Seng is down.
- Several central bank policy meetings are in the spotlight this week, putting monetary policy front and centre in the week ahead.
- Meetings are scheduled for the Fed, the BOE, BOJ, PBOC, and the SARB, to name a few.
- The Fed is largely expected to pause its rate hiking cycle when it meets on Wednesday.
- Recent data outcomes have exhibited mixed signals for the US economy.
- The Fed’s updated dot plot will be released this week and is expected to indicate that policymakers foresee one more rate hike in 2023, but it will likely be a close call.
- Investors will assess Fed Chair Jerome Powell’s comments at the press conference after the meeting.
- The US NAHB homebuilder sentiment, due out today, likely deteriorated in September as borrowers retreat amid high mortgages and home prices.
- Housing starts and building permits for September are on the cards tomorrow.
- The BOE will meet on Thursday and is expected to hike its benchmark interest rate by 25 bps, to 5.5%.
- Key indicators in the pipeline this week are UK CPI and PPI for August; the headline CPI likely climbed, while the core measure is expected to have moderated.
- The Swedish Riksbank is expected to lift its policy rate to 4% on Thursday.
- This could mark the end of its tightening cycle given signs that this economy is headed for a recession.
- The Norges Bank and the SNB will likely also raise rates this week.
- Eurozone and UK flash PMI survey data releases for September are due out this week and will likely provide further indications on how growth is developing amid tighter monetary conditions.
- The Bank of Japan will likely keep policy on hold on Friday.
- Governor Kazuo Ueda’s comments will be watched closely to assess how long the BOJ will likely stand pat with inflation still above target.
- Japan’s CPI data for August is scheduled for release on Friday.
- Locally, the August CPI is due out on Wednesday and is expected to come in at 4.8% y/y, from 4.7% y/y in July.
- Core CPI is expected to come in at 4.7% y/y in August, matching July’s increase.
- The SARB will meet this week to decide on monetary policy and is largely expected to keep the repo rate unchanged on Thursday, at 8.25%.
- Retail sales for July, scheduled for release on Wednesday, are likely to have declined by 1.0% y/y, after having declined 0.9% y/y in June.
- Eskom: Stage 2 loadshedding is currently in place until 4pm; Stage 4 will be implemented then until 5am tomorrow.
- Brent crude oil is up this morning, and up by 9.9% year-to-date.
- The gold price is up this morning, and up by 5.7% year-to-date.
- Brent crude oil is currently at $94.43/bbl; ($93.93/bbl*).
- Gold is at $1928/oz ($1923/oz*).
- SA CDS 246bps*, Brazil 167bps* and Turkey 392bps*.
- Yields: US 10yr at 4.33%*, German bund at 2.67%* and SA 10-year generic at 11.70%*, SA’s R2030 at 10.47%*.
* Denotes Friday’s close.
Key events and data:
- 16h00: US NAHB housing market index (September)