In the loop 03 April 2024

In the loop

Shireen Darmalingam

What you should know this morning:

The rand is weaker this morning, at R18.78/$, after closing stronger yesterday (R18.76/$*).
EM currencies were mixed yesterday; the ZAR (+1.1%), CLP (+1.0%) and COP (+0.9%) were the biggest gainers; the THB (-0.6%), MYR (-0.5%) and TWD (-0.3%) were the biggest losers.
Asian equity markets the Nikkei, Hang Seng and Shanghai Composite are down.

China’s Caixin services PMI increased to 52.7 in March, from 52.5 in February.
The composite PMI for March also increased to 52.7, from 52.5 in February.
Business activity and total new orders improved for a 15th consecutive month; exports also continued to grow in March.

The Eurozone CPI for March likely moderated to 2.5% y/y, from an increase of 2.6% y/y in February.
The moderation is expected on the back of lower food prices in March.
Non-energy industrial goods inflation is also expected to have moderated in March.
However, CPI is expected to have increased by 0.9% m/m in March, from a 0.6% m/m increase in February.
Core CPI is likely to have moderated to 3.0% y/y in March, from 3.1% y/y in February.
The Eurozone unemployment rate for February is likely to have remained unchanged, at 6.4%.

The Turkish CPI for March is due out today; another surge in inflation is expected, despite a rise in interest rates by 4,150 bps.
CPI is likely to come in at 69.0% y/y in March, from 67.1% y/y in February; inflation is on track to reach mid-70% by May.
Inflation is expected to moderate thereafter; the Turkish central bank expects inflation to end the year at around 36%.

Fed policymakers Mary Daly and Loretta Mester expect the central bank to cut rates three times this year.
Both policymakers noted no need to rush to cut rates.
Daly indicated that three interest rate cuts would be a “reasonable baseline”.
Mester noted that “it’s a close call” on whether fewer cuts would be needed.

The US private sector ADP employment report, the precursor to the non-farm payrolls (NFP) report, is scheduled for release tomorrow.
Private payrolls are expected to have increased by 150k in March, following an increase of 140k in February.
The NFP for March, scheduled for release on Friday, are also expected to have slowed, to 214k, following an increase of 275k in February.
The unemployment rate is likely to have improved to 3.8% in March, from 3.9% in February.

The US ISM service index is likely to have increased to 52.8 in March, from 52.6 in February.
The increase is expected on the back of increased interest for online services.

Brent crude oil is currently at $89.01/bbl; ($88.92/bbl*).
Gold is at $2284/oz ($2260/oz*).
SA CDS 265bps*, Brazil 144bps* and Turkey 305bps*.
Yields: US 10yr at 4.34%*, German bund at 2.40%*, SA 10-year generic at 11.99%*, SA’s R2030 at 10.61%*.

* Denotes yesterday’s close.

Key events and data:

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