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In the loop 14 May 2024

In the loop

Shireen Darmalingam

What you should know this morning:

  • The rand is weaker this morning, at R18.36/$, after closing stronger yesterday (R18.34/$*).
  • EM currencies were mixed yesterday; the RUB (+1.2%), CZK (+0.8%) and PLN (+0.6%) were the biggest gainers; the PHP (-0.8%), PEN (-0.8%) and THB (-0.3%) were the biggest losers.
  • Asian equity markets are mixed this morning; the Nikkei is up, while the Hang Seng and Shanghai Composite are down.
  • UK labour data will likely show that wage gains remained elevated in Q1:24.
  • Average weekly earnings (excluding bonuses) for the three months to March are likely to have moderated to 5.9% y/y, from an increase of 6.0% y/y in the three months to February.
  • The unemployment rate is expected to have increased to 4.3% in March, from 4.2% in February.
  • It unlikely that the data will prevent the BOE from cutting interest rates in June, especially as CPI looks set to reach the BOE’s 2% inflation target soon.
  • BOE Chief Economist Huw Pill is due to speak on the economy later today.
  • The US PPI for April likely increased to 2.2% y/y, from 2.1% y/y in March.
  • On a m/m basis, PPI is likely to have increased by 0.3% in April, following a 0.2% increase in March.
  • The increase is expected on the back of higher gasoline prices in April.
  • The focus in the US, however, will likely be on the CPI data tomorrow; both headline and core inflation are likely to have moderated in April.
  • The Fed is likely to start its rate cutting cycle in September, at the earliest.
  • Fed Chair Jerome Powell is scheduled to speak on the economy later today.
  • The US NFIB small business optimism for April is expected to reflect a continued deterioration; the index likely slipped to 88.2 in April, from 88.5 in March.
  • Small businesses reported inflation as a primary concern in March.
  • The percentage of business owners that reported higher selling prices increased to 28% in March, from 21% in February.
  • Locally, mining production for March likely increased by 2.9% y/y, after having increased by 9.9% y/y in February.
  • Mining production is likely to have declined by 0.6% m/m in March, after having increased by 5.0% y/y in February.
  • The Quarterly Labour Force Survey (QLFS) for Q1:24 is also due out today; the unemployment rate is expected to have increased in 32.3% in Q1:24, from 32.1% in Q4:23. 
  • Eskom: loadshedding remains suspended until further notice.
  • Brent crude is up this morning, and up by 8.4% year-to-date.
  • The gold price is up this morning, and up by 13.6% year-to-date.
  • Brent crude oil is currently at $83.49/bbl; ($83.36/bbl*).
  • Gold is at $2344/oz ($2336/oz*).
  • SA CDS 225bps*, Brazil 138bps* and Turkey 275bps*.
  • Yields: US 10yr at 4.48%*, German bund at 2.51%*, SA 10-year generic at 11.87%*, SA’s R2030 at 10.45%*.

* Denotes yesterday’s close.

Key events and data:

  • 08h00: Japan machine tool orders (April)
  • 08h00: UK ILO unemployment rate (March)
  • 11h00: Eurozone ZEW survey expectations (May)
  • 11h00: SA mining production (March)
  • 11h30: SA unemployment rate (Q1:24)
  • 12h00: US NFIB small business optimism (April)
  • 14h30: US PPI (April)

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