In the loop 19 September 2023

In the loop

Shireen Darmalingam

What you should know this morning:

The rand is weaker this morning, at R19.03/$, after closing weaker yesterday (R19.01/$*).
EM currencies were mixed yesterday: the CZK (+1.0%), PLN (+0.4%) and RON (+0.3%) were the biggest gainers; the MXN (-0.4%), CNY (-0.2%) and TWD (-0.2%) were the biggest losers.
Asian equity markets are mixed this morning; the Nikkei is down, while the Hang Seng and Shanghai Composite are up.

The US NAHB housing market index slipped to 45 in September, from 50 in August.
US housing starts and building permits for August are on the cards today.
Housing starts are likely to have declined by 0.9% m/m in August, following an increase of 3.9% m/m in July.
Housing starts have been subject to large downward revisions this year on the back of high mortgage rates.
Building permits, a leading indicator of housing demand, are also seen as having declined, by 0.2% m/m in August.

The US Fed FOMC meeting kicks off today; the Fed is largely expected to hold rates steady.
The updated Fed dot plot will be watched and is expected to indicate that policymakers foresee one more rate hike in 2023; it is, however, likely to be a close call.
Investors will keep an eye on Fed Chair Jerome Powell’s comments at the press conference after the meeting.

The Reserve Bank of Australia (RBA) noted in the minutes of its September MPC meeting that the bank had discussed raising rates in September.
The RBA kept rates unchanged for a third consecutive time in September.
Policymakers noted lags in policy transmission as a reason to keep rates on hold.
They also noted that higher borrowing costs are already beginning to align demand with supply.
The central bank left the door open to further hikes to help bring inflation back to the bank’s target.

The OECD will publish its Economic Outlook today.
The OECD noted at its last update that global GDP growth might come in at 2.7% in 2023 and 2.9% in 2024.

Eskom: Stage 1 loadshedding is currently in place until 4pm; Stage 3 will be implemented then until 5am tomorrow.

Oil prices are up again today on the back of Saudi Arabian and Russian supply cuts.
There are also tentative signs of economic momentum in China, which has boosted demand.
Brent crude oil is up this morning, and up by 10.6% year-to-date.
The gold price is unchanged this morning, and up by 5.9% year-to-date.

Brent crude oil is currently at $95.01/bbl; ($94.43/bbl*).
Gold is at $1931/oz ($1931/oz*).
SA CDS 248bps*, Brazil 165bps* and Turkey 393bps*.
Yields: US 10yr at 4.30%*, German bund at 2.70%* and SA 10-year generic at 11.73%*, SA’s R2030 at 10.49%*.

* Denotes yesterday’s close.

Key events and data:

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