In the loop 29 August 2024

In the loop

Shireen Darmalingam

What you should know this morning:

The rand is stronger this morning, at R17.80/$, after closing weaker yesterday (R17.82/$*).
EM currencies were mixed yesterday; the IDR (+0.5%), THB (+0.2%) and MXN (+0.2%) were the biggest gainers; the COP (-1.4%), BRL (-1.1%) and CZK (-0.7%) were the biggest losers.
Asian equity markets the Nikkei, Hang Seng and Shanghai Composite are down.

The Eurozone’s consumer and economic confidence indices are in the spotlight today.
Consumer confidence for August deteriorated to -13.4, from -13.0 in July; the final estimate for August is due out today.
Economic confidence is expected to have increased in August, to 96.0, from 95.8 in July.

Atlanta Fed President Raphael Bostic has commented that, while it may be time to cut rates, he is still looking for additional data to support lowering interest rates in September.
He noted that his timeline for anticipated interest rate cuts had come forward after inflation fell faster than he expected.
He added that he does not want the Fed to be in a situation where they cut rates and then have to raise rates again.
Bostic said that if he had to err on one side, it would be to wait longer before commencing a rate cutting cycle.

The US Q2:24 GDP (second estimate) is expected to come in at 2.8% q/q, matching the previous estimate, and from 1.4% q/q in Q1:24.
The risk is to the downside given that most of the economic data saw downward revisions.
Amongst those that underwent downward revisions were retail sales and construction spending.
The trade deficit narrowed less than expected in June.
Investors are also awaiting key inflation data out of the US on Friday.
The Fed will keep an eye on core PCE data ahead of its policy meeting in September.
Core PCE is expected to have increased by 0.2% m/m in July, matching June’s increase.

Locally, the July PPI is expected at 4.5% y/y, from 4.6% y/y in June.
On a m/m basis, PPI is likely to have increased by 0.1% in July, after having declined by 0.3% in June.

Brent crude oil is currently at $78.78/bbl; ($78.65/bbl*).
Gold is at $2517/oz ($2502/oz*).
SA CDS 184bps*, Brazil 144bps* and Turkey 272bps*.
Yields: US 10yr at 3.83%*, German bund at 2.26%*, SA 10-year generic at 10.42%*, SA’s R2030 at 9.11%*.

* Denotes yesterday’s close.

Key events and data:

11h00: Eurozone consumer and economic confidence (August)
11h30: SA PPI (July)
14h30: US GDP (Q2:24), advance goods trade balance (July), initial jobless claims (24 August)

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