In the loop 08 September 2023

In the loop

Shireen Darmalingam

What you should know this morning:

The rand is stronger this morning, at R19.10/$, after closing stronger yesterday (R19.18/$*).
EM currencies were mixed yesterday; the COP (+0.9%), HUF (+0.4%) and PHP (+0.3%) were the biggest gainers; the PLN (-1.3%), CZK (-1.3%) and CLP (-0.6%) were the biggest losers.
Asian equity markets the Nikkei, Hang Seng and Shanghai Composite are down.

Several Fed policymakers commented on the US economy and monetary policy yesterday.
Chicago Fed President Austan Goolsbee noted that the debate is now shifting to how long policymakers should be keeping rates elevated.
Dallas Fed President Lorie Logan noted that pausing the hiking cycle at the upcoming meeting might be appropriate.
Logan, however, also signalled that rates might have to rise further to get inflation back to 2%.
New York Fed President John Williams said that, while US monetary policy is "in a good place”, policymakers would need to assess the data to decide on how to proceed on rates.
He noted that policy is having the desired effects of bringing demand and supply more into balance as well as bringing inflation down.

Germany’s CPI for August is scheduled for release today.
Russia’s CPI is also on the cards today; CPI is expected at 5.1% y/y in August, from 4.3% y/y in July.
Inflation is also expected to come in north of the Bank of Russia’s target for the remainder of the year.
The policy rate is expected to stay at 12% – at least until December.

Japan’s economy expanded at a slower pace than initially estimated in Q2:23.
GDP growth was 4.8% q/q in Q2:23, from 6.0% q/q in Q1:23; This as businesses and consumers spent less.
The expansion was driven almost entirely by overseas demand.
The data supports Prime Minister Fumia Kishida’s view that households and companies need more help as they struggle amidst the highest inflation in decades.

The G20 Summit 2023 kicks off in India from 9-10 September.
The Summit, under the theme of “Vasudhaiva Kutumbakam," translating into "One Earth · One Family · One Future”, will focus on policy matters to achieve global economic and sustainable growth.
There is speculation that Indian Prime Minister Narendra Modi may formally change India’s name to “Bharat”.

Eskom: Stage 5 loadshedding is currently in place until 4pm; Stage 6 loadshedding will be implemented then.
The stage of loadshedding was downgraded from 6 to 5 on the back of improved generation capacity and emergency reserves.

Brent crude oil is currently at $89.31/bbl; ($89.92/bbl*).
Gold is at $1925/oz ($1918/oz*).
SA CDS 254bps*, Brazil 174bps* and Turkey 385bps*.
Yields: US 10yr at 4.24%*, German bund at 2.61%* and SA 10-year generic at 11.58%*, SA’s R2030 at 10.37%*.

* Denotes yesterday’s close.

Key events and data:

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