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In the loop 14 September 2023

In the loop

Shireen Darmalingam

What you should know this morning:

  • The rand is stronger this morning, at R18.76/$, after closing stronger yesterday (R18.81/$*).
  • EM currencies were mixed yesterday; the CLP (+1.3%), PLN (+1.1%) and COP (+0.9%) were the biggest gainers; the RUB (-1.5%), THB (-0.3%) and IDR (-0.2%) were the biggest losers.
  • Asian equity markets are mixed this morning; the Nikkei is up, while the Hang Seng and Shanghai Composite are down. 
  • US PPI for August, scheduled for release today, will have been boosted by higher energy prices in August.
  • PPI is likely to have increased by 1.3% y/y in August, from a 0.8% y/y increase in July.
  • On a m/m basis, PPI is expected to have increased by 0.4% in August, from an increase of 0.3% m/m in July. 
  • Retail sales for August are also on the cards today; a moderation in consumer demand may have become apparent in August retail sales.
  • Retail sales growth is expected to have moderated to 0.1% m/m in August, from 0.7% m/m in July.
  • The ECB monetary policy meeting is in the limelight today.
  • Consensus expectations are for the central bank to keep rates unchanged today; however, the decision is likely to be a close call.
  • The ECB is expected to update its forecasts for growth and inflation at this meeting.
  • The European Commission earlier this week lowered its predictions for economic expansion and said that inflation would still average more than 3% in 2024.
  • Investors will keep a close eye on comments from ECB President Christine Lagarde at a press conference following the interest rate announcement.
  • Locally, mining production for July is on the cards today; production is expected to have declined by 0.2% y/y, after having increased by 1.1% y/y in June.
  • The South African Chamber of Commerce and Industry (SACCI) commented yesterday that trade conditions had remained "tight and unsteady" in August.
  • The trade conditions survey highlighted that more than half of the surveyed respondents are experiencing negative conditions.
  • Around 57% of the respondents experienced negative trade conditions in August.
  • Sales volumes, new orders, backlog on orders received, supplier deliveries, inventory level, selling prices and employment were in negative territory in August.
  • There are, however, promising signs for the future; 56% of respondents are still positive about trade conditions in the coming six months.
  • Eskom: Stage 6 loadshedding is currently in place and will continue until further notice.
  • Brent crude oil is up this morning, and up by 7.5% year-to-date.
  • The gold price is up this morning, and up by 4.7% year-to-date.
  • Brent crude oil is currently at $92.38/bbl; ($91.88/bbl*).
  • Gold is at $1910/oz ($1909/oz*).
  • SA CDS 249bps*, Brazil 173bps* and Turkey 390bps*.
  • Yields: US 10yr at 4.24%*, German bund at 2.65%* and SA 10-year generic at 11.65%*, SA’s R2030 at 10.39%*.

* Denotes yesterday’s close. 

Key events and data: 

  • 11h30: SA mining production (July)
  • 14h15: Eurozone ECB MPC interest rate decision – no rate change expected
  • 14h30: US retail sales (August), initial jobless claims (9 September), PPI (August), business inventories (July)

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