In the loop

What you should know this morning:

• The rand is trading at R17.90/$ this morning, after closing weaker yesterday (R17.94/$*).
• EM currencies were mixed yesterday; the BRL (-1.3%), COP (-0.9%) and MXN (-0.8%) lost the most; the MYR (+0.7%), THB(+0.6%) and PEN (+0.2%) gained the most.
• Asian equity markets the Nikkei, Hang Seng and Shanghai Composite are down this morning.

• Markets will be contemplating the US presidential debate between Democrat Kamala Harris and Republican Donald Trump.
• The showdown saw key economic issues such as inflation, tariffs and taxes take centre stage.
• Harris proposed tax cuts for families (through an increase in the child tax credit) and small business to “create an opportunity economy”.
• Trump, too, argued for tax cuts and vowed to extend and expand the cuts he passed in 2017 to “create a great economy”.
• There was a back-and-forth on tariffs, with Trump proposing to enforce further tariffs on other countries, while Harris claimed that this would lead to higher prices for Americans.
• The debate on inflation was heated, with Trump blaming the Biden-Harris administration for the four-decade high inflation peak roughly two years ago.
• Odds for victory for Harris climbed slightly after the debate.

• US inflation data for August will be a key focus today.
• CPI inflation is expected to have decelerated to 2.6% y/y in August, from 2.9% y/y in July.
• In m/m terms, CPI inflation likely remained at 0.2% in August, in line with July’s reading.
• The Fed is widely expected to start cutting interest rates at the upcoming meeting next week (17-18 September).
• US MBA mortgage applications for the week ending 6 September are also due out today.
• Mortgage rates have eased in anticipation of the Fed’s interest rate cut, which likely supported mortgage applications.
• Yesterday, Fed vice-chair Michael Barr announced a “reproposal” which sees a more than halving of a previously proposed increase to capital requirements for the largest US banks.

• BOJ policy member Junko Nakagawa signalled more interest rate increases should conditions allow.
• Nakagawa argued that financial conditions would remain easy with further hikes, referring to real interest rates.
• She noted the need to monitor the upside risks to inflation.
• The yen reached its strongest level in eight months after Nakagawa’s speech.

• UK monthly GDP data for July is due out this morning.
• Real GDP likely rose 0.2% m/m in July, after stagnating in June; on a three-month basis, growth is expected at 0.6%.
• Industrial and manufacturing production for July is also due out, with production expected to have slowed during the month.
• Industrial production likely rose 0.3% m/m in July, down from 0.8% m/m in June; factory output is expected to have increased by 0.2% m/m in July, after growing by 1.1% m/m in June.

• Locally, there are no major data releases scheduled for today.

• Brent crude is up this morning, and down by 9.7% year-to-date.
• The gold price is up this morning, and up by 22.2% year-to-date.

• Brent crude oil is currently at $69.59/bbl; ($69.19/bbl*).
• Gold is at $2521/oz ($2514/oz*).
• SA CDS 191bps*, Brazil 157bps* and Turkey 277bps*.
• Yields: US 10yr at 3.64%*, German bund at 2.13%*, SA 10-year generic at 10.33%*, SA’s R2030 at 9.00%*.

* Denotes yesterday’s close.

Key events and data:

• 08h00: UK monthly GDP (July)
• 08h00: UK industrial, manufacturing production (July)
• 08h00: UK trade balance (July)
• 13h00: US MBA mortgage applications (6 September)
• 14h30: US CPI (August)

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