In the loop
Christelle Grobler
What you should know this morning:
- The rand is stronger this morning, at R17.62/$, after closing weaker yesterday (R17.69/$*).
- EM currencies were mixed yesterday; the CLP (-1.1%), PLN (-0.8%) and KRW (-0.6%) lost the most; the PEN (+0.3%), COP (+0.2%) and BRL (+0.2%) gained the most.
- Asian equity markets, the Nikkei, Hang Seng and Shanghai Composite are up this morning.
- Japan’s CPI inflation slowed to 2.5% y/y in September, from 3.0% in August – the first deceleration in inflation since April.
- Government utility subsidies are a main driver of lower inflation, according to the Ministry of Internal Affairs; lower electricity and gas prices subtracted 0.55 ppts from overall inflation.
- Core inflation measures, which exclude volatile items from the consumer basket, were mixed in September.
- CPI, excluding food and energy items, rose to 2.1% y/y in September, from 2.0% y/y in August, while CPI, excluding only food, slowed to 2.4% y/y in September, from 2.8% y/y in August.
- The BOJ will meet later this month; the CPI reading supports expectations that the bank will keep interest rates unchanged.
- China released a slew of economic data, including Q3:24 GDP, earlier today.
- Real GDP growth came in at 4.6% y/y in Q3:24, the slowest pace since March 2023, and down from 4.7% y/y in Q2:24.
- This puts the year-to-date figure at a weaker-than-expected growth rate of 4.8% y/y.
- In q/q terms, growth was 0.9% in Q3:24, following a downwardly revised increase of 0.5% q/q (0.7% previously) in Q2:24.
- Other key indicators for September showed a broad improvement in China’s economy late in Q3:24.
- Industrial production growth picked up more than expected, reaching 5.4% y/y in September, from 4.5% y/y in August.
- Retail sales growth also surprised on the upside, with growth accelerating to 3.2% y/y in September, from 2.1% y/y in August.
- The surveyed jobless rate declined to 5.1% in September, from 5.3% in August.
- Key US housing market data for September is due for release today.
- Housing starts likely slowed slightly, to 1,350k in September, from 1,356k in August.
- Building permits also likely cooled to 1,460k in September, from a downwardly revised 1,470k in August.
- New house construction indicators have been on a downward trajectory since mid-2022.
- While lower interest rates should assist new house construction over time, relatively high inventory will likely keep housing starts subdued in the near term.
- Locally, there are no major data releases scheduled for today.
- Brent crude is up this morning, and down by 3.0% year-to-date.
- The gold price is up this morning, and up by 31.4% year-to-date.
- Brent crude oil is currently at $74.74/bbl; ($74.45/bbl*).
- Gold is at $2711/oz ($2692/oz*).
- SA CDS 181bps*, Brazil 154bps* and Turkey 266bps*.
- Yields: US 10yr at 4.09%*, German bund at 2.21%*, SA 10-year generic at 10.55%*, SA’s R2035 at 10.61%*.
* Denotes yesterday’s close.
Key events and data:
- 08h00: UK retail sales (September)
- 10h00: Eurozone current account (August)
- 14h30: US housing starts, building permits (September)
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