In the loop

What you should know this morning:

• The rand is weaker this morning, at R18.12/$, after closing weaker yesterday (R18.11/$*).
• EM currencies were largely down yesterday; the HUF (-1.0%), MXN (-0.9%) and KRW (-0.7%) were the biggest losers; the TRY gained 0.1%.
• Asian equity markets the Nikkei, Hang Seng and Shanghai Composite are down.

• BOE Deputy Governor Dave Ramsden yesterday noted that he would consider voting for a faster pace of interest rate cuts if uncertainty around the UK economy subsides in coming months.
• Ramsden expects the UK economy to “continue to normalize,” with an ongoing trend toward “low and relatively stable inflation”.
• He expressed his support for the policy committee’s guidance for slow reductions in borrowing costs because of lingering economic uncertainties.

• ECB Governing Council member Yannis Stournaras commented that the Eurozone is on the cusp of sustainably reaching the bank’s 2% inflation target.
• He noted that the ECB may claim success in taming consumer prices.
• Stournaras added that the focus should now shift towards the risks to economic growth.

• Eurozone consumer confidence for November is expected to have improved, albeit only very slightly.
• The index is expected to come in at -12.4 in November, from -12.5 in October.

• Fed Governor Michelle Bowman yesterday commented that she would prefer the Fed to move cautiously on further interest rate cuts because progress in reducing inflation has slowed.
• This would enable the bank to better assess how far rates are from the end point.
• Bowman recognised that the Fed has “not yet achieved its inflation goal and is closely watching the evolution of the labour market”.
• Bowman added that the central bank has made significant progress in bringing inflation down since early 2023.
• However, progress seems to have stalled in recent months.
• Fed Governor Lisa Cook commented that it would be appropriate for the central bank to cut rates towards a more neutral stance over time.
• Cook cited risks to the Fed’s employment and inflation goals as “roughly in balance.”
• She added that the “magnitude and timing” of rate cuts would depend on incoming data and the economic outlook.

• US existing homes sales, due out today, likely increased in October.
• Existing home sales are expected to have increased by 2.9% m/m (to 3.95m) in October, after having declined by 1.0% m/m (to 3.84m) in September.
• Declining mortgage rates in October, after the Fed cut rates in September, are likely to have supported sales during the month.
• The US leading index, also due out today, is expected to have declined by 0.3% m/m in October, following a 0.5% m/m decline in September.

• Locally, the SARB meets today and is largely expected to cut the repo rate by 25 bps, to 7.75%.
• We will keep an eye on any changes to the SARB’s inflation and growth outlook over the medium term.

• Brent crude is up this morning, and down by 5.2% year-to-date.
• The gold price is up this morning, and up by 28.7% year-to-date.

• Brent crude oil is currently at $73.07/bbl; ($72.81/bbl*).
• Gold is at $2655/oz ($2651/oz*).
• SA CDS 187bps*, Brazil 159bps* and Turkey 259bps*.
• Yields: US 10yr at 4.41%*, German bund at 2.35%*, SA 10-year generic at 10.26%*, SA’s R2035 at 10.30%*.

* Denotes yesterday’ close. 

Key events and data:

• 15h00: SA SARB interest rate decision – 25 bps rate cut expected
• 17h00: Eurozone consumer confidence (November)
• 17h00: US leading index (October), existing home sales (October)

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