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In the loop 18 September 2023

In the loop

Shireen Darmalingam

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)

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