In the loop

What you should know this morning:

• The rand is weaker this morning, at R18.27/$, after closing stronger yesterday (R18.19/$*).
• EM currencies were mixed yesterday; the MXN (+0.7%), CLP (+0.3%) and PEN (+0.3%) were the biggest gainers; the THB (-1.2%), MYR (-0.9%) and IDR (-0.5%) were the biggest losers.
• Asian equity markets the Nikkei, Hang Seng and Shanghai Composite are up.

• Japan’s GDP for Q3:24 came in higher than expected at 0.9% q/q (SA), following a revised 2.2% q/q (SA) increase in Q2:24.
• This increase was driven by a further improvement in private consumption despite a typhoon weighing on sentiment in Q3:24.
• Today’s data supports the case for further monetary policy normalisation.

• UK GDP data for Q3:24 is due out today and will likely show this economy as losing steam.
• GDP is expected to come in at 0.2% q/q, from 0.5% q/q in Q2:24.
• The monthly GDP for September is also on the cards today; growth is expected to come in at 0.2% m/m in September, matching August’s increase.
• Consumers have thus far shown restraint despite healthy wage gains.
• Household spending is likely to support economic activity more meaningfully in the coming months.

• BOE policymaker Catherine Mann commented yesterday that policymakers should wait for further evidence that inflation has been tamed before cutting rates further.
• Mann called for an “activist” approach rather than a “gradualist” approach in trimming rates.
• She added that waiting to ease interest rates buys time to learn more about growth and inflation developments in order to make a better assessment of whether the inflation risk has subsided sufficiently.

• US Fed Chair Jerome Powell yesterday commented that there is no need to hurry the pace of the rate-cutting cycle. 
• He commented that the recent performance of the US economy has been “remarkably good”, giving the Fed room to make decisions at a considered pace.
• Powell also said that uncertainty over the neutral level of rates provides yet another reason for the Fed to move cautiously.
• Several Fed policymakers have noted that the Fed funds rate remains in restrictive territory and that they support cutting rates gradually.

• A barrage of economic data is due out of the US today.
• October’s retail sales likely increased by 0.3% m/m, after increasing by 0.4% m/m in August.
• Consumer fundamentals, however, remained fragile in October due to the effects of hurricanes during the month.
• Business inventories for September, also scheduled for release today, are expected to come in softer.
• The US Empire manufacturing survey for November is due today; sentiment likely increased in November.
• The index is expected to come in at 0.0 in November, from -11.9 in October.

• Locally, it’s a quiet day as far as data releases are concerned.

• Brent crude is down this morning, and down by 6.6% year-to-date.
• The gold price is down this morning, and up by 24.4% year-to-date.

• Brent crude oil is currently at $71.97/bbl; ($72.56/bbl*).
• Gold is at $2565/oz ($2573/oz*).
• SA CDS 185bps*, Brazil 161bps* and Turkey 256bps*.
• Yields: US 10yr at 4.43%*, German bund at 2.34%*, SA 10-year generic at 10.36%*, SA’s R2035 at 10.41%*.

* Denotes yesterday’s close. 

Key events and data:

• 09h00: UK GDP (Q3:24), monthly GDP (September), visible trade balance (September), industrial production (September), manufacturing production (September)
• 15h30: US Empire manufacturing (November), retail sales (October)
• 16h15: US industrial production (October), manufacturing production (October)
• 17h00: US business inventories (September)

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