In the loop
What you should know this morning:
- The rand is stronger this morning, at R18.40/$, after closing weaker yesterday (R18.44/$*).
- EM currencies were mixed yesterday; the KRW (+0.5%), PHP (+0.3%) and IDR (+0.1%) were the biggest gainers; the HUF (-3.6%), CLP (-2.8%) and CZK (-2.7%) were the biggest losers.
- Asian equity markets the Nikkei, Hang Seng and Shanghai Composite are down.
- China’s new home prices increased for the first time in 18 months in February.
- New home prices rose by 0.3% m/m in February, from 0% in January.
- The data suggests that government’s efforts to revive the housing market are starting to pay off.
- The ECB’s MPC meeting takes centre stage today; the bank is largely expected to hike its benchmark interest rate.
- The collapse of SVB brought financial stability concerns back to the fore and may see the ECB hike by less than 50 bps.
- Worries about the stability of Credit Suisse have surfaced and could therefore see the ECB change its policy course.
- The focus will then shift to any signals from the Governing Council on the future course of rate hikes as the dust settles from the current financial market turmoil.
- The Swiss National Bank (SNB) and Credit Suisse are discussing options to stabilize Credit Suisse.
- Credit Suisse aims to borrow up to CHF50bn from the SNB and has offered to repurchase up to CHF3bn worth of senior debt securities.
- Former US Treasury Secretary Lawrence Summers commented yesterday that central banks would need to assess the “disinflationary impulse” emanating from the turmoil in the banking industry very carefully.
- Summers warned that it would be a mistake for central banks to appear to abandon concerns about price growth.
- He added that central banks need to continue focusing on their inflation-fighting mandate.
- Several central banks may scale back their rate hikes at upcoming meetings due to the financial market turmoil caused by the collapse of SVB and Signature Bank.
- The Fed is now expected to hike rates by 25 bps next week, while the option of no rate change is a possibility.
- The BOE is now seen holding rates steady next week, while the ECB could hike by a lesser 25 bps today.
- Locally, the BER’s inflation expectations survey is scheduled for release today
- Eskom: Stage 3 loadshedding will continue until further notice.
- Brent crude oil is up this morning, and down by 13.1% year-to-date.
- The gold price is down this morning, and up by 5.0% year-to-date.
- Brent crude oil is currently at $74.61/bbl; ($73.69/bbl*).
- Gold is at $1916/oz ($1924/oz*).
- SA CDS 291bps*, Brazil 248bps* and Turkey 558bps*.
- Yields: US 10yr at 3.45%*, German bund at 2.13%* and SA 10-year generic at 10.88%*, SA’s R186 at 8.41%*.
* Denotes yesterday’s close.
Key events and data:
- 14h30: US initial jobless claims (11 March), housing starts (February), building permits (February)
- 15h15: Eurozone ECB MPC decision – 50 bps hike expected
- SA BER inflation expectations survey