In the loop 12 September 2023

In the loop

Shireen Darmalingam

What you should know this morning:

The rand is weaker this morning, at R18.90/$, after closing stronger yesterday (R18.86/$*).
EM currencies were mixed yesterday; the RUB (+2.4%), MXN (+1.4%) and ZAR (+1.4%) were the biggest gainers; the TRY (-0.1%), INR (-0.1%) and PHP (-0.1%) were the biggest losers.
Asian equity markets are mixed this morning; the Nikkei, Hang Seng and Shanghai Composite are up.

A New York Fed survey released yesterday noted Americans’ overall views on inflation as little changed in August.
Nonetheless, Americans expect price increases for rent, housing and food.
Furthermore, US consumers have downgraded their views of their personal financial situations.
The August Consumer Sentiment Survey noted that respondents expect inflation a year from now at 3.6%, slightly up from 3.5% in July 2023.
Inflation three years from now is expected at 2.8%, compared to 2.9% in July 2023.
Five-year inflation expectations have increased to 3%, from 2.9% this July.

The US NFIB small business optimism index for August is scheduled for release today and likely slipped to 91.5, from 91.9 in July.
The slippage is expected as goods producers remain wary of accumulating excess inventory.
Sentiment may also be constrained by slower hiring plans as excess demand for labour continues dissipating.

The UK labour data is in the spotlight today; the ILO unemployment rate is likely to have increased to 4.3% in the three months to July, from 4.2% in the three months to June.
Job vacancies have been on a downward trend since the start of this year.
Private sector wage gains (excluding bonuses) are expected to have remained unchanged at 8.2% y/y in the three months to July.
The data will be closely monitored by the BOE as it assesses whether to hike rates further in the current cycle.
The BOE expects the unemployment to stay close to 4% until early 2024, as per the bank’s August forecasts.

The BOE is largely expected to hike its benchmark interest rate by 25 bps on 21 September.
Catherine Mann, a known policy hawk, commented yesterday that she did not favour a pause in rate hikes to see if monetary policy was working.
Mann’s comments followed comments from three BOE policymakers, Andrew Bailey, Huw Pill and Sir Jon Cunliffe, that UK interest rates were reaching a peak and could be held there.

Eskom: Stage 4 loadshedding is currently in place and will continue until further notice.

Brent crude oil is currently at $90.99/bbl; ($90.64/bbl*).
Gold is at $1921/oz ($1923/oz*).
SA CDS 242bps*, Brazil 171bps* and Turkey 378bps*.
Yields: US 10yr at 4.29%*, German bund at 2.63%* and SA 10-year generic at 11.61%*, SA’s R2030 at 10.36%*.

* Denotes yesterday’s close.

Key events and data:

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