Closing the loop
- The rand is stronger at R15.93/$ (R16.20/$*) today; it ranged between R15.90/$ and R16.21/$.
- The currency is above its 50-day, 100-day and 200-day moving averages (R15.21/$, R15.30/$ and R15.23/$).
- EM currencies are mixed today; the HUF (+2.3%), ZAR (+1.7%) and BRL (+1.6%) are the biggest gainers; the RUB (-1.6%), TRY (-1.5%) and IDR (-0.3%) are the biggest losers.
- Eurozone GDP came in at 0.3% q/q in Q1:22 from an increase of 0.2% q/q in Q4:21.
- On a y/y basis, GDP came in 5.1% in Q1:22 following a 5% increase in Q4:21.
- Q1:22 growth was driven by consumers who are emerging from the pandemic with pent-up demand and large amounts of savings.
- Eurozone CPI (final estimate) for April is scheduled for release tomorrow; CPI is expected to have increased to 7.5% y/y in April from 7.4% y/y in March.
- Japan’s Q1:22 GDP is expected to have contracted on both a q/q and y/y basis.
- GDP is expected to have fallen by 1.8% q/q in Q1:22 from an increase of 4.6% q/q in Q4:21.
- The contraction is expected on the back of the restrictions on economic activity due to lockdown curbs to reduce the spread of the virus.
- Both private consumption and public investment is expected to have fallen in Q1:22.
- US retail sales increased by 0.9% m/m in April from an upwardly revised increase of 1.4% m/m in March.
- Consumers relied heavily on credit cards in April amid higher prices and plunging sentiment.
- The data suggests that demand remains solid despite rising inflation and interest rates.
- Locally, we look to the April CPI print tomorrow, which we expect to come in at 5.8% y/y from 5.9% y/y in March.
- We don’t expect the April CPI data to meaningfully influence the MPC’s inflation assessment at the MPC meeting this week.
- Retail sales for April are also due out tomorrow and is expected to have increased by 1.5% y/y in March after having contracted by 0.9% y/y in February.
- Stage 3 loadshedding will be implemented from 17h00 until 22h00 due to capacity constraints.
- The oil price is up by 0.9% today, and up by 48.2% in the year-to-date.
- The gold price is up by 0.5% today, and down by 0.3% in the year-to-date.
- Brent crude oil is at $115.24/bbl ($114.24/bbl*).
- Gold price is at $1823/oz ($1815/oz*).
- SA CDS is at 261bps (266bps*), Brazil 240bps (243bps*), Turkey 701bps (712bps*).
- Yields: US 10yr at 2.97% (2.88%*), German bund at 1.05% (0.937%*) and SA 10-year generic at 10.38% (10.40%*), SA’s R186 is at 8.35% (8.35%*).
- The JSE ALSI is up by 0.9% today (+0.8%*).
* Denotes yesterday close.
Key events and data:
- 01h50: Japan GDP (Q1:22)
- 03h30: China new home prices (April)
- 06h30: Japan industrial production (March)
- 10h00: SA CPI (April)
- 11h00: Eurozone CPI (April)
- 13h00: SA retail sales (March)
- 13h00: US MBA mortgage applications (13 May)
- 14h30: US housing starts, building permits (April)