In the loop 29 November 2023

In the loop

Shireen Darmalingam

What you should know this morning:

The rand is stronger this morning, at R18.57/$, after closing stronger yesterday (R18.58/$*).
EM currencies were mixed yesterday; the HUF (+1.1%), PLN (+1.0%) and CZK (+0.9%) were the biggest gainers, the PEN (-0.2%), ARS (-0.2%) and RUB (-0.1%) were the biggest losers.
Asian equity markets the Nikkei, Hang Seng and Shanghai Composite are down.

The US Conference Board consumer confidence index increased to 102 in November, from a downwardly revised 99.1 in October.
This increase came on the back of more optimistic views about the outlook for the labour market.
The expectations index also increased in November amid a rebound in consumers’ assessment of short-term income and hiring prospects.
The steady moderation in inflation is providing consumers with relief after a period of price increases.
The current conditions index slipped in November.

The US Q3:23 GDP print (second estimate), due out on today, is expected to come in at 5.0% q/q, from 2.1% q/q in Q2:23.
Q3:23 strength came from consumer spending on temporary attractions.
The Fed will refer to this version of the Beige Book, due out today, at the 12-13 December FOMC meeting.
The Fed will look to see whether real economic data concurs with the general view based on anecdotes.
The Beige Book could help clarify the direction and magnitude of recent economic developments.

Several Fed policymakers commented on the economy and monetary policy yesterday.
Fed Governor Christopher Waller is “increasingly confident that policy is well positioned to slow the economy and get inflation back to 2%”.
Fed Governor Michelle Bowman expects further hikes to reach the price target “in a timely way”.
Chicago Fed President Austan Goolsbee is “keeping an eye on housing inflation, which has come down some but still has a way to go”.

The Reserve Bank of New Zealand (RBNZ) has kept its benchmark interest rate unchanged, at 5.5%, for a fourth straight meeting.
The RBNZ, however, signalled an increased risk that it might hike rates again next year.
The bank noted that “inflation remains too high, and the Committee remains wary of ongoing inflationary pressures”.

The OECD will publish its updated Economic Outlook today.
The Eurozone consumer (final estimate) and economic confidence for November are scheduled for release today; both are likely to have improved in November.

Locally, the M3 money supply and private sector credit extension (PSCE) for October are due out today.
PSCE is expected to come in at 4.3% y/y in October, from 4.6% y/y in September.
M3 money supply is likely to come in at 7.1% y/y in October, after having increased by 7.67% y/y in September.
Eskom: Stage 5 loadshedding is currently in place until 8pm; Stage 6 loadshedding will follow until 5am tomorrow.

Brent crude oil is currently at $81.63/bbl; ($81.68/bbl*).
Gold is at $2046/oz ($2040/oz*).
SA CDS 244bps*, Brazil 147bps* and Turkey 342bps*.
Yields: US 10yr at 4.32%*, German bund at 2.49%* and SA 10-year generic at 11.29%*, SA’s R2030 at 9.99%*.

* Denotes yesterday’s close.

Key events and data:

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