Closing the loop
- The rand is weaker at R14.97/$ (R14.92/$*) today; it traded in a range of R14.89/$ to R15.01/$.
- It is above its 50-day, 100-day and 200-day moving averages (R14.72/$, R14.45/$ and R14.58/$, respectively).
- EM currencies were mixed today; the HUF (+0.5%), PEN (+0.5%) and PLN (+0.4%) were amongst the biggest gainers; the INR (-0.5%), MXN (-0.4%) and PHP (-0.4%) were amongst the biggest losers.
- Concerns over inflation are dominating markets’ attention this week.
- Policymakers are debating whether the current higher inflation trends are transitory.
- It’s been suggested that while inflation may be transitory, it doesn’t necessarily mean that it’s likely to end soon.
- The BOE's chief economist has expressed his concern that the magnitude and duration of the spike in inflation is proving to be greater than expected.
- BOE policymakers have also indicated they were closer to raising interest rates to battle inflation.
- The US September CPI is due for release this week and is expected to have remained elevated, albeit steady, at 5.3% y/y.
- The UK unemployment rate for August is due tomorrow and is expected to have slipped to 4.5% from 4.6% in July.
- The improvement is expected as government’s furlough scheme ended in September and could lead to this change in direction for unemployment.
- The SACCI business confidence index fell to a one-year low in September to 91.0 pts from 91.9 pts in August.
- This comes on the back of economic activity being hamstrung by lockdown restrictions together with unease which persisted following the riots in July.
- Despite the slippage, the average for the first nine months of the year was 9.8 pts higher than the comparable period last year.
- The oil price is up by 2.0% today and up by 62.1% in the year-to-date.
- The gold price is up by 0.1% today and down by 7.4% in the year-to-date.
- Brent crude oil is at $83.99/bbl; ($82.39/bbl*).
- Gold price is at $1758/oz ($1757/oz*).
- SA CDS is at 217bps (213bps*), higher than Brazil 204bps (209bps*) and lower than Turkey 443bps (435bps*).
- Yields: US 10yr at 1.61% (1.61%*), German bund at -0.124% (-0.151%*) and SA 10-year generic at 10.0% (9.94%*), SA’s R186 is at 7.97% (7.90%*).
- The JSE ALSI is up by 1.4% today (+0.1%*).
* Denotes Friday’s close.
Key events and data:
- 01h50: Japan PPI (September)
- 08h00: UK ILO unemployment rate (August)
- 11h00: Eurozone ZEW survey expectations (October)
- 11h30: SA mining production (August)
- 13h00: SA manufacturing production (August)
- 16h00: US JOLTS job openings (August)