In the loop

What you should know this morning:

• The rand is stronger this morning, at R17.50/$, after closing stronger yesterday (R17.55/$*).
• EM currencies were mixed yesterday; the COP (+0.8%), ZAR (+0.6%) and CLP (+0.2%) were the biggest gainers; the HUF (-0.9%), PHP (-0.6%) and KRW (-0.6%) were the biggest losers.
• Asian equity markets are mixed this morning; the Nikkei and Hang Seng are up, while the Shanghai Composite is down.

• Central bank watch: the Bank of Korea today cut its base rate, by 25 bps, to 3.25%.
• This cut comes as the housing market showed signs of easing, while inflation moderated considerably.

• The UK’s monthly GDP for August, due out today, is likely to show this economy recording a decent pace of growth in Q3:24.
• The monthly GDP for August is also on the cards today; growth is expected to have increased 0.2% m/m in August, after having stagnated in July.
• Such an increase would be consistent with the rebound in retail sales in August and the improvement in the PMI indicators.
• Household spending is likely to have been supported by inflation easing as well as by the recent interest rate cut by the BOE.

• Atlanta Fed President Raphael Bostic yesterday noted that he was open to cutting interest rates by 25 bps next month, or holding rates steady at the November FOMC meeting, depending on how the economic outlook develops.
• Following new projections at the September policy meeting, Bostic pencilled in only one more 25 bps cut this year.
• Bostic added that the bank has “the ability to be patient and wait and let things play out a little longer”.
• New York Fed President John Williams commented that it would be appropriate to “continue the process of moving the stance of monetary policy to a more neutral setting over time”.
• Chicago Fed President Austan Goolsbee remarked that the overall trend for inflation over 12 to 18 months was clearly moving down.

• The US University of Michigan sentiment for October is due out today.
• Consumer sentiment likely increased in October after recent news that the economy had briskly added jobs and that the unemployment had fallen in September.
• The sentiment index is likely to have increased to 71.0 in October, from 70.1 in September.
• One-year ahead inflation expectations are expected at 2.7%, unchanged from September.
• The 5-10 year inflation expectations are likely to come in at 3.0% in October, from 3.1% in September.
• PPI for September is also on the cards today; PPI is expected to come in at 1.6% y/y, from 1.7% y/y in August.
• On a m/m basis, PPI is expected to have increased by 0.1% in September, from 0.1% in August.

• Brent crude is down this morning, and up by 2.8% year-to-date.
• The gold price is up this morning, and up by 28.2% year-to-date.

• Brent crude oil is currently at $79.17/bbl; ($79.40/bbl*).
• Gold is at $2644/oz ($2619/oz*).
• SA CDS 178bps*, Brazil 152bps* and Turkey 269bps*.
• Yields: US 10yr at 4.06%*, German bund at 2.25%*, SA 10-year generic at 10.33%*, SA’s R2035 at 10.40%*.

* Denotes yesterday’s close. 

Key events and data:

• 08h00: UK monthly GDP (August), industrial production (August), manufacturing production (August), visible trade balance (August)
• 14h30: US PPI (September)
• 16h00: US University of Michigan sentiment, 1 yr and 5-10 yr inflation expectations (October)

Read PDF