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In the loop 19 November 2024

In the loop

Shireen Darmalingam

What you should know this morning:

  • The rand is weaker this morning, at R17.96/$, after closing stronger yesterday (R17.94/$*).
  • EM currencies were mixed yesterday; the ZAR (+1.3%), HUF (+0.8%) and BRL (+0.8%) were the biggest gainers; the TRY (-0.5%), TWD (-0.2%) and MYR (-0.1%) were the biggest losers.
  • Asian equity markets are mixed this morning; the Nikkei and Hang Seng are up, while the Shanghai Composite is down.
 
  • ECB Governing Council member Yannis Stournaras commented yesterday that economic activity in the Eurozone would weaken, were president-elect Donald Trump to implement his proposed tariffs.
  • He added that any levies could lead to a recession and a period of deflation in the medium term.
  • Greek Prime Minister Kyriakos Mitsotakis also warned of the damage a trade war with the US would cause in the region. 
  • ECB Governing Council member Boris Vujcic noted that the risk that the ECB misses its inflation target has risen from six months ago.
 
  • The Eurozone CPI for October (final estimate) is due out today; headline CPI is likely to come in at 2.0% y/y in October, from 1.7% y/y in September.
  • Core CPI is likely to come in at 2.7% y/y in October, matching the previous estimate and the increase in September.
  • The reading will provide the necessary details to better understand the drivers behind domestically generated cost pressure.
  • The data will likely support a further easing of interest rates in 2025.
  • The ECB next meets on 12 December to decide on rates.
 
  • The US NAHB housing market index increased to 46 pts in November, the highest since 51 in April, from 43 in October.
  • The index, however, remains in negative territory (below 50). 
  • The improvement came on the back of an increase in the future sales index, which increased to 64 in November, from 57 in October.
  • The index of prospective buyer traffic was also up in November.
  • The NAHB noted that sentiment may have been supported by the Republican win in the recent US election, which has alleviated some policy uncertainties.
  • Still, high mortgage rates and home prices remain significant headwinds to sentiment.
 
  • US housing starts and building permits for October are due out today.
  • Housing starts are expected to have continued falling in October, to 1,337k, from 1,354k in September.
  • Building permits are likely to come in higher in October, at 1,435k, from 1,425k in September.
 
  • Locally, it’s a quiet day as far as data releases are concerned.
 
  • Brent crude is up this morning, and down by 4.7% year-to-date.
  • The gold price is up this morning, and up by 27.1% year-to-date.
 
  • Brent crude oil is currently at $73.39/bbl; ($73.30/bbl*).
  • Gold is at $2623/oz ($2610/oz*).
  • SA CDS 191bps*, Brazil 166bps* and Turkey 261bps*.
  • Yields: US 10yr at 4.41%*, German bund at 2.37%*, SA 10-year generic at 10.31%*, SA’s R2035 at 10.35%*.
 

* Denotes yesterday’ close. 

Key events and data:

  • 11h00: Eurozone current account (September)
  • 12h00: Eurozone CPI (October – final)
  • 15h30: US housing starts, building permits (October)
 

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