Closing the loop
- The rand is weaker at R16.04/$ (R16.01/$*) today; it ranged between R15.94/$ and R16.09/$.
- The currency is above its 50-day, 100-day and 200-day moving averages (R15.66/$, R15.34/$ and R15.35/$).
- EM currencies are mixed today; the RUB (+3.4%), PLN (+0.9%) and HUF (+0.8%) are the biggest gainers; the CLP (-0.7%), PHP (-0.6%) and BRL (-0.4%) are the biggest losers.
- It was a quiet day on the global economic data front today.
- US existing home sales data for May are due for release tomorrow; sales are expected to have fallen by 3.7% m/m in May after declining by 2.4% m/m in April.
- This comes as the housing market continues to normalise from post-Covid levels.
- Rising mortgage rates have also dampened housing affordability; contract signings have been down for 6 consecutive months.
- Declining affordability is also threatening to reduce the supply of available housing as existing owners hesitate to sell.
- The UK’s BOE policymaker Catherine Mann noted today that the bank needs to raise rates more aggressively to stave off sterling depreciation.
- Mann also noted that domestic inflation is likely to come in higher than initially anticipated.
- Mann voted for a 50 bps rise in rates at last week’s MPC meeting.
- She said that a more robust policy move reduces the risk that domestic inflation already embedded is further boosted by inflation imported via sterling depreciation.
- Locally, it was a quiet day as far as data releases were concerned.
- We look to the SARB’s leading indicator for April tomorrow; the index increased to 128 pts in March from 127.2 pts in February.
- Eskom announced that Stage 2 loadshedding will be implemented from 17h00 to 22h00 and will continue through to Thursday.
- This is due to the continued shortage of generation capacity.
- The oil price is down by 0.7% today, and up by 44.5% in the year-to-date.
- The gold price is down by 0.1% today, and up by 0.5% in the year-to-date.
- Brent crude oil is at $112.39/bbl ($113.12/bbl*).
- Gold price is at $1837/oz ($1839/oz*).
- SA CDS is at 287bps (288bps*), Brazil 284bps (283bps*), Turkey 818bps (826bps*).
- Yields: US 10yr at 3.22% (3.22%*), German bund at 1.71% (1.66%*) and SA 10-year generic at 10.71% (10.69%*), SA’s R186 is at 8.67% (8.67%*).
- The JSE ALSI is up by 1.6% today (-3.1%*).
* Denotes Friday’s close.
Key events and data:
- 09h00: SA leading indicator (April)
- 10h00: Eurozone current account (April)
- 16h00: US existing home sales (May)