In the loop 17 November 2023

In the loop

Shireen Darmalingam

What you should know this morning:

The rand is weaker this morning, at R18.38/$, after closing weaker yesterday (R18.36/$*).
EM currencies were mixed yesterday; the CLP (+0.7%), MXN (+0.5%) and PLN (+0.3%) were the biggest gainers, the COP (-1.7%), ZAR (-0.9%) and MYR (-0.3%) were the biggest losers.
Asian equity markets are mixed this morning; the Nikkei is up, while the Hang Seng and Shanghai Composite are down.

The NAHB housing market index slipped to 34 (its lowest level this year) in November, from 40 in October.
High mortgage rates have had a significant impact on the property market this year and have worsened affordability, keeping prospective buyers from the housing market.
The report noted declines in the measures of both current and expected sales, as well as a decline in the gauge of prospective-buyer traffic.
Sentiment was down in three of four regions, dropping to the lowest level this year in the South and West.
Higher mortgage rates throughout October likely slowed the pace of building permit issuance and housing starts; the data is due out today.
Housing starts are likely to have declined by 0.6% m/m, to 1,350k, in October, after having increased by 7.0% m/m (and from 1,358k) in September.
Building permits are expected to have declined by 1.4% m/m in October, following a 4.5% m/m decline in September.

In the Eurozone, the second estimate of CPI for October will likely confirm that underlying price pressures have been subsiding.
CPI is likely to have moderated to 2.9% y/y in October, from 4.3% y/y in September.
Such a moderation may be ascribed to the drop in energy inflation (to -11.1% y/y) in October.
Easing food inflation will also likely have contributed.
The final reading will likely support the case for the ECB to keep rates unchanged at its next policy meeting, scheduled for 14 December.

UK retail sales are expected to have increased by 0.4% m/m in October, after having fallen by 0.9% m/m in September.
Retail sales may have been hampered by the unseasonably wet weather in October.
The full impact of higher interest rates is yet to play out throughout the economy.
BOE Deputy Governor Dave Ramsden commented yesterday that the bank might need to keep interest rates high for an extended period.
He said that the MPC had previously communicated that policy would need to be sufficiently restrictive for long enough to return inflation to the 2% target sustainably in the medium term.
The BOE’s final MPC meeting of the year is scheduled for 14 December.

Brent crude oil is currently at $77.46/bbl; ($77.42/bbl*).
Gold is at $1984/oz ($1983/oz*).
SA CDS 247bps*, Brazil 157bps* and Turkey 355bps*.
Yields: US 10yr at 4.43%*, German bund at 2.59%* and SA 10-year generic at 11.32%*, SA’s R2030 at 10.04%*.

* Denotes yesterday’s close.

Key events and data:

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