In the loop
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:
- 10h00: Eurozone current account (July)
- 11h00: Eurozone CPI (August – final), OECD publishes Economic Outlook
- 14h30: US housing starts, building permits (August)