In the loop
What you should know this morning:
- The rand is stronger this morning, at R17.01/$, after closing stronger yesterday (R17.02/$*).
- EM currencies were mixed yesterday; the MYR (+1.8%), KRW (+1.8%) and THB (+1.4%) were the biggest gainers; the ARS (-0.5%), HUF (-0.3%) and MXN (-0.1%) were the biggest losers.
- Asian equity markets are mixed this morning; the Nikkei and Hang Seng are down, while the Shanghai Composite is up.
- The Turkish Central Bank has cut its one-week repo rate by 150 bps, to 9%, adhering to calls from President Recep Tayyip Erdogan to take interest rates into single digits by December.
- Policymakers, however, plan to end the monetary easing cycle.
- The bank noted that rates have reached “a sufficient level with regard to growing risks concerning global demand”.
- Governor Sahap Kavcioglu commented that additional measures “supporting the effective transmission” of monetary policy would be implemented.
- The TRY has depreciated almost 29% against the dollar this year, the worst performer in emerging markets after the ARS.
- The Riksbank has hiked its benchmark rate by 75 bps, to 2.5%, the highest since 2008.
- This hike follows data that showed a wide range of goods and services becoming costlier, and at a faster pace than expected.
- The bank signalled that further tightening would be needed to tame inflation even as it pencils in a worsening slump for Sweden’s economy.
- The bank lifted its CPI forecasts for next year and cut its GDP forecasts.
- The German Q3:22 GDP (final estimate), due out today, is expected at 0.3% q/q, from 0.1% q/q in Q2:22.
- The German IFO business outlook, out yesterday, rose from historically low levels as the risk of energy shortages this winter receded.
- The government is preparing a wide range of measures to shield households and businesses from surging costs.
- The expectations gauge increased to 80 in November, from a revised 75.9 in October.
- Nonetheless, the index remains depressed as Germany braces for a recession due to the fallout from Russia’s war in Ukraine.
- Locally, it’s a quiet day as far as data releases are concerned.
- Eskom continues with Stage 2 loadshedding until 4pm and Stage 3 from 4pm until 5am tomorrow.
- Brent crude oil is up this morning, and up by 10.3% year-to-date.
- The gold price is up this morning, and down by 3.8% year-to-date.
- Brent crude oil is currently at $85.76/bbl; ($85.34/bbl*).
- Gold is at $1758/oz ($1755/oz*).
- SA CDS 249bps*, Brazil 258bps* and Turkey 530bps*.
- Yields: US 10yr at 3.69%*, German bund at 1.85%* and SA 10-year generic at 10.71%*, SA’s R186 at 8.57%*.
* Denotes yesterday’s close.
Key events and data:
- It’s a quiet day.