In the loop 19 May 2023

In the loop

Shireen Darmalingam

What you should know this morning:

The rand is stronger this morning, at R19.32/$, after closing weaker yesterday (R19.36/$*).
EM currencies were mixed yesterday; the PHP (+0.5%), KRW (+0.3%) and TWD (+0.2%) were the biggest gainers; the HUF (-2.2%), PLN (-1.4%) and MXN (-1.1%) were the biggest losers.
Asian equity markets are mixed this morning; the Nikkei is up while the Hang Seng and Shanghai Composite are down.

US House Speaker Kevin McCarthy commented that he expects the House to consider a debt ceiling deal next week.
However, an "agreement in principle" is likely to be reached this weekend.
The two sides have been negotiating the scope of spending cuts.

The G7 summit kicks off today in Japan.
G7 leaders have indicated that they will impose additional sanctions on Russia and add restrictions on goods it uses in the war.
They have also reinforced their commitment to keeping Moscow's sovereign assets immobilized until the war is over.
The G7 leaders are also looking to further reduce reliance on Russian energy.

Japan’s CPI overshot expectations in April, at 3.5% y/y, after having increased by 3.2% y/y in March.
Core CPI came in at 3.4% y/y in April, following a 3.1% y/y increase in March.
Today’s data supports the view that the central bank will have to upwardly revise its CPI forecasts.
This may fuel speculation of policy adjustment in the months ahead, even as early as July this year.
BOJ Governor Kazuo Ueda has previously indicated that once the inflation target comes into sight, the central bank would adjust existing policy, including the yield curve control program.

Locally, S&P ratings agency is scheduled to publish its SA sovereign ratings review today.
Eskom: Stage 4 loadshedding is currently in place until 4pm; Stage 5 will be implemented then until 5am tomorrow.

Brent crude oil is currently at $76.52/bbl; ($75.86/bbl*).
Gold is at $1962/oz ($1955/oz*).
SA CDS 326bps*, Brazil 218bps* and Turkey 681bps*.
Yields: US 10yr at 3.63%*, German bund at 2.44%* and SA 10-year generic at 11.94%*, SA’s R2030 at 11.13%*.

* Denotes yesterday’s close.

Key events and data:

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