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In the loop 17 October 2024

In the loop

Shireen Darmalingam

What you should know this morning:

  • The rand is unchanged this morning, at R17.64/$, after closing stronger yesterday (R17.64/$*).
  • EM currencies were mixed yesterday; the CLP (+0.8%), THB (+0.5%) and IDR (+0.4%) were the biggest gainers; the MXN (-1.1%), HUF (-0.5%) and CZK (-0.5%) were the biggest losers.
  • Asian equity markets are mixed this morning; the Nikkei is down, while the Hang Seng and Shanghai Composite are up.
 
  • Central bank watch: the ECB’s monetary policy committee meeting is in the spotlight today.
  • The ECB is expected to cut its benchmark interest rate by 25 bps.
  • Policymakers are seen following up with another 25 bps cute at the December policy meeting.
  • The Central Bank of the Republic of Turkey will likely keep the policy rate on hold, at 50%, for a seventh consecutive time.
  • The central bank is expected to start lowering rates in the coming months; risks are tilted towards a delay in cutting rates.
 
  • The Eurozone CPI for September (final estimate) is likely to confirm that underlying price pressures are easing in the region.
  • CPI for September is expected to come in at 1.8% y/y, unchanged from the previous estimate, and down from 2.2% y/y in August.
  • Core CPI is likely to come in at 2.7% y/y, also matching the previous estimate, and from 2.8% y/y in August.
  • The data will likely support the case for the ECB to cut interest rates today.
 
  • US September retail sales are expected to have increased by 0.3% m/m, following a 0.1% m/m increase in August.
  • Such an increase is expected on the back of a rebound in vehicle sales, albeit offset by a seasonally sharp decline in gasoline prices.
  • Industrial production for September is also due today; September’s survey data points to a slowdown in production after August’s surge.
  • Industrial production is expected to have declined by 0.2% m/m in September, after having increased by 0.8% m/m in August.
  • Business inventories for August likely increased 0.3% m/m, following a 0.4% m/m increase in July. 
  • Retailers have pulled inventories forward to hedge against potential supply-chain disruptions.
  • The NAHB housing market index for October is on the cards today; sentiment among homebuilders is expected to have increased to 42 in October, from 41 in September.
  • Housing affordability remains a challenge for the housing market.
 
  • Locally, it is a quiet day as far as data releases are concerned.
 
  • Brent crude is up this morning, and down by 3.3% year-to-date.
  • The gold price is up this morning, and up by 30.1% year-to-date.
 
  • Brent crude oil is currently at $74.51/bbl; ($74.22/bbl*).
  • Gold is at $2683/oz ($2674/oz*).
  • SA CDS 179bps*, Brazil 154bps* and Turkey 265bps*.
  • Yields: US 10yr at 4.02%*, German bund at 2.18%*, SA 10-year generic at 10.44%*, SA’s R2035 at 10.50%*.
 

* Denotes yesterday’s close. 

Key events and data:

  • 11h00: Eurozone CPI (September – final), trade balance (August)
  • 14h15: Eurozone ECB interest rate decision – 25 bps rate cut expected
  • 14h30: US retail sales (September), initial jobless claims (12 October)
  • 15h15: US industrial production (September), capacity utilisation (September), manufacturing production (September)
  • 16h00: US business inventories (August), NAHB housing market index (October)
 

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