In the loop 24 March 2023

In the loop

Shireen Darmalingam

What you should know this morning:

The rand is weaker this morning, at R18.10/$, after closing stronger yesterday (R18.07/$*).
EM currencies were mixed yesterday; the KRW (+2.3%), HUF (+1.9%) and ZAR (+1.4%) were the biggest gainers; the BRL (-1.1%), ARS (-0.2%) and MXN (-0.1%) were the biggest losers.
Asian equity markets the Nikkei, Hand Seng and Shanghai Composite are down.

The US Fed’s new economic projections, published this week, imply a sharp drop in US economic activity this year despite the strong start in January.
The Fed sees the US economy expanding by 0.4% this year; the previous estimate in December was 0.5%.
Given the strong Q1:23, these new forecasts imply a growth contraction in Q2:23 until December.
Several Fed policymakers see risks to economic growth as tilted to the downside.

US Treasury Secretary Janet Yellen is “prepared to take additional actions if warranted” to ensure the safety of US bank deposits.
In her new congressional testimony, she noted that the Fed has tools to act quickly to prevent contagion and that these tools can be used again if needed.

The Eurozone consumer confidence index declined in March, to -19.2, from -19.1 in February.
This now ends five consecutive months of increases.
Despite recent gains, consumer confidence remains well below the long-term average.
The index is based on surveys of households in the Eurozone; however, at least 80% of responses was collected before the current banking turmoil in global financial markets.
Confidence was affected by the turmoil, and elevated interest rates as well as concerns of an economic slowdown.

Japan’s Jibun Bank manufacturing PMI improved in March but was still below the 50 benchmark; the PMI increased to 48.6 in March, from 47.7 in February.
The services PMI increased to the strongest in almost a decade, to 54.2 in March, from 54 in February; tourists from China boosted demand.
Several countries’ PMI data releases (manufacturing, services and composite indices) are due out today.
The Eurozone manufacturing PMI likely remained in contraction in March; the services index likely slipped though still stayed above the 50 benchmark.
The UK services PMI for March likely slipped to 53, from 53.5 in February; the manufacturing PMI likely remained in contraction.
Both US PMIs are expected to have deteriorated in March, with the manufacturing index still in contraction.

Locally, it’s a quiet day as far as data releases are concerned.
Eskom: Stage 2 loadshedding is currently in place until 4pm: Stage 3 will resume thereafter.

Brent crude oil is currently at $75.78/bbl; ($75.91/bbl*).
Gold is at $1991/oz ($1999/oz*).
SA CDS 291bps*, Brazil 248bps* and Turkey 536bps*.
Yields: US 10yr at 3.42%*, German bund at 2.19%* and SA 10-year generic at 10.74%*, SA’s R186 at 8.34%*.

* Denotes yesterday’s close.

Key events and data:

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