In the loop
Shireen Darmalingam
What you should know this morning:
- The rand is stronger this morning, at R17.38/$, after closing weaker yesterday (R17.43/$*).
- EM currencies were largely down yesterday; the RUB (-2.9%), THB (-1.3%) and ZAR (-1.2%) were the biggest losers; the BRL gained 0.2%.
- Asian equity markets: the Nikkei is down, while the Hang Seng is up.
- Central bank watch: the National Bank of Poland will meet today and is likely to keep its benchmark interest rate on hold, at 5.75%.
- ECB Governing Council member Martins Kazaks has noted the ECB as likely to cut interest rates further at the policy meeting on 17 October, and beyond.
- Kazaks noted risks to the economy as having become more pronounced.
- He said that “the risks of still sticky domestic, especially services, inflation and too-weak growth are increasingly balanced with some tilt towards weak growth”.
- Several ECB policymakers are due to speak on the economy and monetary policy later today.
- Atlanta Fed President Raphael Bostic commented that the “Fed should be willing to explore more outsized rate cuts if the jobs market deteriorates”.
- He indicated that the Fed would be watching the upcoming jobs data closely.
- Bostic added that the Fed’s base case is for “orderly” easing of interest rates, with inflation expected to continue moderating and the US labour market to hold up.
- He noted that he would support a further 50 bps rate cut, should the labour market show unexpected weakness.
- The US ISM manufacturing index undershot expectations, at 47.2 in September, matching the August outcome.
- The index remained in contraction for a sixth consecutive month in September.
- Thirteen industries remained in contraction in September, led by printing, plastics and rubber, and wood products.
- The data implies the US manufacturing sector as still struggling.
- The US private sector ADP employment report for September is due out today.
- Private payrolls are likely to have improved in September; a 123k increase is expected, after an increase of 99k in August.
- Investors are also keeping an eye on the non-farm payrolls (NFP) for September, due out on Friday, which likely increased, by 150k, following an increase of 142k in August.
- Locally, it’s a quiet day as far as data releases are concerned.
- Brent crude is up this morning, and down by 2.7% year-to-date.
- The gold price is down this morning, and up by 28.4% year-to-date.
- Brent crude oil is currently at $74.96/bbl; ($73.56/bbl*).
- Gold is at $2649/oz ($2666/oz*).
- SA CDS 178bps*, Brazil 153bps* and Turkey 271bps*.
- Yields: US 10yr at 3.74%*, German bund at 2.03%*, SA 10-year generic at 10.10%*, SA’s R2035 at 10.18%*.
* Denotes yesterday’s close.
Key events and data:
- 11h00: Eurozone unemployment rate (August)
- 13h00: US MBA mortgage applications (27 September)
- 14h15: US ADP employment change (September)
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