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In the loop 23 September 2022

In the loop

Shireen Darmalingam

What you should know this morning:

  • The rand is unchanged this morning, at R17.61/$, after closing stronger yesterday (R17.61/$*).
  • EM currencies were mixed yesterday; the RUB (+3.1%), BRL (+1.1%) and COP (+0.8%) were the biggest gainers; the KRW (-1.2%), INR (-1.1%) and CLP (-1.0%) were the biggest losers.
  • Asian equity markets the Nikkei, Hang Seng and Shanghai Composite are down.
  • The UK’s GfK consumer confidence index fell to a record low in September, of -49, from -44 in August.
  • All sub-categories of the index fell in September amid the rising cost of living and wider economic uncertainties in the region.
  • Inflation is persistently high and continues to erode buying power and personal finances.
  • The Gfk expects consumer confidence to worsen in the coming months into winter.
  • UK Chancellor Kwasi Kwarteng is due to deliver a mini-Budget later today.
  • The mini-budget is likely to be aimed at supporting households and businesses hit by decades-high inflation.
  • Focus is likely to be on the details of fixing the energy price cap at £2500 per year for average households and delivering tax cuts.
  • Kwarteng announced yesterday that he would be scrapping ex-PM Boris Johnson's plan to hike taxes on salaries.
  • Several countries’ PMI data for September will be released today.
  • The flash PMI surveys for the Eurozone and the UK will provide more insight into the likelihood of Europe slipping into recession under the weight of rising energy costs.
  • The Eurozone S&P Global composite PMI is expected to have remained in contraction in September.
  • The UK S&P Global composite PMI dropped into contraction in August, implying that this economy is starting to struggle as the cost of living rises.
  • The US S&P Global manufacturing PMI for September is expected to have slipped, albeit remaining above the 50-benchmark line.
  • The services and composite PMIs are likely to have improved, but are expected to remain in contraction.
  • Locally, it’s a quiet day as far as data releases are concerned.
  • Eskom has extended Stage 5 loadshedding through to tomorrow morning.
  • Brent crude oil is down this morning, and up by 15.7% year-to-date.
  • The gold price is down this morning, and down by 8.8% year-to-date.
  • Brent crude oil is currently at $89.99/bbl; ($90.46/bbl*).
  • Gold is at $1669/oz ($1674/oz*).
  • SA CDS 295bps*, Brazil 268bps* and Turkey 750bps*.
  • Yields: US 10yr at 3.71%*, German bund at 1.96%* and SA 10-year generic at 11.03%*, SA’s R186 at 9.13%*.

* Denotes yesterday’s close. 

 Key events and data: 

  • 10h00: Eurozone S&P Global manufacturing, services and composite PMI (September)
  • 10h30: UK S&P Global manufacturing, services and composite PMI (September)
  • 15h45: US S&P Global manufacturing, services and composite PMI (September)

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