In the loop

What you should know this morning:

• The rand is stronger this morning, at R17.22/$, after closing stronger on Friday (R17.26/$*).
• EM currencies were mixed on Friday; the RUB (+2.1%), COP (+0.8%) and ZAR (+0.5%) were the biggest gainers; the ARS (-0.4%), MXN (-0.2%) and KRW (-0.1%) were the biggest losers.
• Asian equity markets the Nikkei, Hang Seng and Shanghai Composite are up.

• Central bank watch: the Fed will meet on Wednesday to decide on rates and is largely expected to cut the Fed funds rate by 25 bps.
• Investors will keep an eye of Fed Chair Jerome Powell’s press conference after the interest rate announcement.
• The Bank of Canada is also expected to cut rates by 25 bps on Wednesday.
• The ECB is expected to keep its benchmark interest rate unchanged on Thursday.
• The BOJ will likely keep its policy rate at 0.50% on Friday.
• The State Bank of Pakistan is also expected to keep rates on hold, at 11%, today.

• US and Chinese trade negotiators said they have reached agreement on several contentious trade issues, paving the way for Presidents Trump and Xi Jinping to finalise a trade deal and ease tensions between the two countries.
• China’s official PMIs for October, due for release on Friday, are expected to show steady economic momentum.
• A slight weakening in the manufacturing PMI is likely to be offset by a modest pickup in the non-manufacturing index.

• Germany’s Ifo business survey for October is due out today.
• Eurozone CPI for October, scheduled for release on Friday, is expected to return to the central bank’s 2% target, down slightly from 2.2% y/y in September.
• The ECB’s quarterly Bank Lending Survey (BLS), due tomorrow, is expected to show that lending conditions continued to stabilise after marked improvement over the past two years.
• Eurozone GDP, scheduled for release on Thursday, is likely to confirm modest growth in Q3:25.

• The ongoing US government shutdown continues to delay the release of key economic data.
• Publication of Q3:25 GDP, as well as September’s personal income and spending figures, have been postponed as a result.
• Meanwhile, the Conference Board’s consumer confidence index for October, due out tomorrow, is unlikely to show strong optimism among consumers.
• The S&P Case-Shiller home price index for August is also scheduled for release tomorrow.

• Locally, the M3 and private sector credit extension (PSCE) for September are scheduled for release on Wednesday.
• PSCE is expected to come in at 5.9% y/y in September, matching August’s increase. 
• The September PPI is on the cards on Thursday and is expected to come in at 2.6% y/y, after having increased by 2.1% y/y in August.
• The monthly Budget balance data for September is also due for release on Thursday; the budget deficit came in at R38.3bn in August. 
• The September trade balance is scheduled for release on Friday; a trade surplus of R6.9bn in September is expected, from a surplus of R4.0bn in August. 

• The Financial Action Task Force (FATF) on Friday removed South Africa from the grey list after successfully completing the Action Plans.
• Among the improvements cited were a “sustained increase in investigations and prosecutions of serious and complex money laundering and the full range of terrorist financing activities”.

• Brent crude is up this morning, and down by 11.3% year-to-date.
• The gold price is down this morning, and up by 55.5% year-to-date.

• Brent crude oil is currently at $66.19/bbl; ($65.94/bbl*).
• Gold is at $4080/oz ($4113/oz*).
• SA CDS 158bps*, Brazil 140bps* and Turkey 251bps*.
• Yields: US 10yr at 4.00%*, German bund at 2.62%*, SA 10-year generic at 9.01%*, SA’s R2035 at 8.89%*.

* Denotes Friday’s close.

Key events and data: 

• 11h00: Eurozone ECB 1 yr and 3 yr inflation expectations (September), M3 money supply (September)
• 11h00: Germany IFO business climate survey (October)

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