In the loop
Shireen Darmalingam
What you should know this morning:
- The rand is weaker this morning, at R17.34/$, after closing stronger on Friday (R17.25/$*).
- EM currencies were mixed on Friday; the HUF (+0.9%), ZAR (+0.6%) and CNY (+0.5%) were the biggest gainers; the CLP (-2.2%), RON (-0.5%) and RUB (-0.3%) were the biggest losers.
- Asian equity markets the Nikkei, Hang Seng and Shanghai Composite are down.
- The OECD will be releasing new forecasts tomorrow; the agency last cut its 2023 global growth outlook to 2.2%, from 2.8%, and pointed to Europe as the weak link.
- With much of the EU bloc possibly already contracting, further downward revisions to growth are likely.
- US GDP growth is also likely to be bleaker than previous estimates, with a US recession pencilled in for next year.
- Atlanta Fed President Raphael Bostic noted that the Fed should conclude its tightening cycle after no more than 100 bps of further hikes.
- Bostic’s view of 4.75-5% as a peak is less aggressive than some of the more hawkish policymakers.
- US durable goods orders and new home sales are due out this week.
- Several countries’ PMI data releases are due out this week.
- PMI in the Eurozone and the UK are expected to have weakened, while US factory activity is on the brink of contraction.
- Eurozone consumer confidence and German Ifo business sentiment are also scheduled for release this week.
- Central bank watch: China’s PBoC has kept policy rates unchanged.
- The US FOMC minutes of the November meetings are due out this week.
- The minutes are likely to show consensus on the need to slow the pace of rate hikes but division on the end-point.
- Investors will also look to see whether there is consensus to prioritize inflation or the economy.
- The ECB MPC minutes are due out on Thursday.
- The RBNZ may deliver a sixth straight 50 bps increase on Wednesday and signal further rate increases in 2023.
- The central banks of Sweden, South Africa and Turkey are due to make interest rate decisions this week.
- Locally, S&P has reaffirmed SA’s sovereign rating at BB- with a positive outlook.
- The October CPI, due out this week, is expected at 7.4% y/y, from 7.5% y/y in September.
- On a m/m basis, CPI likely increased by 0.2% in October, after having increased by 0.1% in September.
- PPI for October is also due out this week as well as the SARB’s leading indicator for September.
- The SARB’s MPC interest rate decision is due on Thursday; a 50 bps hike in the repo rate is expected.
- Eskom has implemented Stage 4 loadshedding until 4pm; Stage 5 loadshedding is expected at 4pm until midnight.
- Various stages of loadshedding will be implemented throughout this week.
- Brent crude oil is down this morning, and up by 11.5% year-to-date.
- The gold price is down this morning, and down by 4.5% year-to-date.
- Brent crude oil is currently at $86.71/bbl; ($87.62/bbl*).
- Gold is at $1746/oz ($1750/oz*).
- SA CDS 259bps*, Brazil 265bps* and Turkey 589bps*.
- Yields: US 10yr at 3.78%*, German bund at 2.01%* and SA 10-year generic at 10.94%*, SA’s R186 at 8.77%*.
* Denotes Friday’s close.
Key events and data:
- It’s a quiet day.
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