In the loop
Shireen Darmalingam
What you should know this morning:
- The rand is stronger this morning, at R17.25/$, after closing stronger yesterday (R17.26/$*).
- EM currencies were mixed yesterday; the CLP (+1.6%), HUF (+1.3%) and COP (+0.8%) were the biggest gainers; the BRL (-1.0%), ARS (-0.8%) and PEN (-0.2%) were the biggest losers.
- Asian equity markets the Nikkei, Hang Seng and Shanghai Composite are up.
- The Eurozone composite PMI data for November is likely to provide insight into the depth of this region’s economic downturn.
- The index is expected to have slipped to 47 in November, from 47.3 in October.
- This comes on the back of a surge in energy prices, broad-based inflation, and tighter financial conditions.
- The manufacturing PMI is also likely to have deteriorated in November.
- The UK composite PMI will probably have fallen again in November, to 47.5 from 48.2 in October, on tighter funding conditions and the cost-of-living crisis.
- The US composite PMI is expected at 48 in November, from 48.2 in October; both the manufacturing gauge likely slipped in November.
- The US FOMC minutes of the November meeting are due out tonight.
- 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 prioritise inflation or the economy.
- US durable goods orders and new home sales data for October are scheduled for release today.
- The University of Michigan sentiment for November (final estimate) is expected to have fallen, reflecting uncertainty over inflation, rising interest rates, and the likelihood of a recession in 2023.
- The RBNZ has hiked its benchmark interest rate by a record 75 bps, to a 14-year high of 4.25%.
- This comes as the central bank fights high inflation; the bank expects the New Zealand economy to enter a recession in mid-2023.
- The governor noted that the cash rate may rise further to a peak of 5.5% in Q3:23.
- Locally, the October CPI is expected at 7.4% y/y, from 7.5% y/y in September.
- On a m/m basis, CPI is likely to have increased by 0.2% in October, after having increased by 0.1% in September.
- Eskom has implemented Stage 2 loadshedding until 4pm; Stage 4 loadshedding is expected at 4pm until 5am.
- Brent crude oil is down this morning, and up by 13.4% year-to-date.
- The gold price is down this morning, and down by 5.1% year-to-date.
- Brent crude oil is currently at $88.25/bbl; ($88.36/bbl*).
- Gold is at $1736/oz ($1739/oz*).
- SA CDS 261bps*, Brazil 260bps* and Turkey 569bps*.
- Yields: US 10yr at 3.75%*, German bund at 1.97%* and SA 10-year generic at 10.88%*, SA’s R186 at 8.65%*.
* Denotes yesterday’s close.
Key events and data:
- 10h00: SA CPI (October)
- 11h00: Eurozone S&P manufacturing, services and composite PMI (November)
- 11h30: UK S&P manufacturing, services and composite PMI (November)
- 14h00: US MBA mortgage applications (18 November)
- 15h30: US durable goods orders (October), initial jobless claims (19 November)
- 16h45: US S&P manufacturing, services and composite PMI (November)
- 17h00: US University of Michigan sentiment, 1 yr and 5-10 yr inflation expectations (November – final), new home sales (October)
- 21h00: US FOMC meeting minutes (2 November)
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