In the loop 22 November 2022

In the loop

Shireen Darmalingam

What you should know this morning:

The rand is stronger this morning, at R17.28/$, after closing weaker yesterday (R17.33/$*).
EM currencies were mixed yesterday; the BRL (+1.3%), COP (+0.9%) and HKD (+0.2%) were the biggest gainers; the HUF (-1.5%), THB (-1.3%) and KRW (-1.1%) were the biggest losers.
Asian equity markets are mixed this morning; the Nikkei and Shanghai Composite are up, while the Hang Seng is down.

San Francisco Fed President Mary Daly commented on the path to price stability yesterday.
Daly noted that the FOMC would be mindful of impact lags whilst hiking rates further to drive down inflation.
Daly noted that “adjusting too little will leave inflation too high”, while hiking “too much could lead to an unnecessarily painful downturn”.
She said that getting rates to 5% "is a good starting point."
Daly said that policymakers need to remain cognisant of the gap between the Fed funds rate and the tightening in financial markets.
Fed President Loretta Mester noted that the Fed may ease the pace of tightening next month as officials assess the impact of previous rate moves.
Several Fed policymakers are due to speak today.

Hungary’s central bank will decide on rates today, and is likely to keep the benchmark interest rate steady at 13%.
The Bank of Israel has raised interest rates for the 6th consecutive time, albeit less than expected, by 50 bps, to 3.25%.

The OECD will publish its latest Economic Outlook today.
The agency’s most recent forecasts, released in September, pointed to a worsening outlook for next year.
The US economy is largely expected to fall into a recession; the UK is already facing a lengthy recession.
While economic growth in the Eurozone has held up better than expected, recession risks are still looming amid energy shortages and elevated inflation.

Locally, the SARB’s leading indicator for September is due out today; the index slipped to 123.4 in August, from 126.2 in July.
Eskom has implemented Stage 2 loadshedding until 4pm; Stage 4 loadshedding is expected at 4pm until 5am.

Brent crude oil is currently at $87.85/bbl; ($87.45/bbl*).
Gold is at $1744/oz ($1736/oz*).
SA CDS 269bps*, Brazil 267bps* and Turkey 594bps*.
Yields: US 10yr at 3.82%*, German bund at 1.99%* and SA 10-year generic at 10.92%*, SA’s R186 at 8.71%*.

* Denotes yesterday’s close.

Key events and data:

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