In the loop 11 September 2023

In the loop

Shireen Darmalingam

What you should know this morning:

The rand is stronger this morning, at R19.00/$, after closing stronger on Friday (R19.13/$*).
EM currencies were largely down yesterday; the HUF (+0.4%), RUB (+0.4%) and COP (+0.4%) were the biggest gainers; the CLP (-1.3%), CNY (-0.2%) and PEN (-0.2%) were the biggest losers.
Asian equity markets are mixed this morning; the Nikkei and Hang Seng are down, while the Hang Seng is up.

G20 Summit 2023: G20 leaders have adopted the Delhi Declaration under India's presidency following consensus among member countries.
There was 100% consensus on all developmental and geopolitical issues.
The declaration places emphasis on strong, sustainable, balanced, and inclusive growth.
The declaration noted that countries “must refrain from the threat or use of force to seek territorial acquisition against the territorial integrity and sovereignty or political independence of any state”.
It also emphasized the protection of the vulnerable through promoting equitable growth and enhancing macroeconomic and financial stability.
G20 nations have applauded India’s success in reaching an agreement on a joint communique.

China’s CPI increased by 0.1% y/y in August, after having declined by 0.3% y/y in July.
PPI contracted for an 11th consecutive month in August, by 3.0% y/y, after having declined by 4.4% y/y in July.
While the slight increase in consumer prices may stop news headlines about deflation, demand is currently too weak to allow most retail businesses to raise prices.
The People’s Bank of China (PBOC) is expected to lower its one-year rate by 10 basis points this week.
Economic activity data out this week will likely be a mixed bag; industrial production will likely have increased, while fixed asset investment growth may have held steady.
Retail sales are expected to have weakened further.

The ECB will meet on Thursday to decide on rates; it is likely to be a close call.
The UK labour data is in the spotlight this week; the data will be closely monitored by the BOE as it assesses whether to hike rates further in the current cycle.
The BOE is largely expected to hike its benchmark interest rate by 25 bps on 21 September.
The Bank of Russia will meet on Friday and is likely to keep the policy rate unchanged after August’s emergency 350 bps rate hike.

The US Fed is currently in a blackout period ahead of its FOMC meeting next week (19-20 September).
The US CPI for August is due out on Wednesday; the CPI report will likely present a mixed picture.
CPI is expected to have increased by 0.6% m/m in August, from a 0.2% m/m increase in July.
Core CPI is expected at 0.2% m/m in August, matching July’s increase.
PPI for August, due out on Thursday, would have been boosted by higher energy prices in August.
Retail sales for August are also due out on Thursday; a moderation in consumer demand may have become apparent in the August retail sales.
Friday will see the release of the Empire State manufacturing survey for September; an improvement is expected.

Locally, manufacturing production for July, due out later today, is expected at 4.8% y/y, from a 5.5% y/y increase in June.
Mining production for July, due out on Thursday, likely increased by 0.9% y/y, after having increased by 1.1% y/y in June.
Eskom: Stage 3 loadshedding is currently in place until 4 pm; Stage 4 loadshedding will be implemented then.

Brent crude oil is currently at $90.56/bbl; ($90.65/bbl*).
Gold is at $1926/oz ($1919/oz*).
SA CDS 246bps*, Brazil 170bps* and Turkey 379bps*.
Yields: US 10yr at 4.29%*, German bund at 2.61%* and SA 10-year generic at 11.58%*, SA’s R2030 at 10.35%*.

* Denotes Friday’s close.

Key events and data:

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