In the loop
Shireen Darmalingam
What you should know this morning:
- The rand is weaker this morning, at R16.72/$, after closing stronger on Friday (R16.65/$*).
- EM currencies were mixed on Friday; the COP (+1.5), MXN (+1.3%) and KRW (+0.9%) were the biggest gainers; the RUB (-0.9%), CLP (-0.4%) and TRY (-0.2%) were the biggest losers.
- Asian equity markets are mixed this morning; the Nikkei and Shanghai Composite are up, while the Heng Seng is down.
- Iran war: diplomatic efforts to prevent a renewed direct US-Iran confrontation continued to make only limited progress.
- Iran reiterated that there was “no military solution” to the war and maintained that any reopening of the Strait of Hormuz remained conditional on US acceptance of Tehran's proposals.
- Indirect mediation efforts involving Qatar continued amid disagreements.
- Central bank watch: investors are expected to keep an eye on the minutes of the 15-16 September US FOMC meeting, which saw the committee unanimously voting to hike the Fed funds rate by 25 bps.
- The minutes are likely to show broad support for further tightening as policymakers chase swifter progress on inflation.
- The minutes of the ECB's 9-10 September meeting are in focus on Thursday.
- Investors will keep an eye on clues regarding the timing of the next interest rate hike.
- The Reserve Bank of India is expected to keep its benchmark interest rate unchanged on Wednesday.
- The Eurozone Sentix investor confidence index for October, due today, is expected to have slipped to 4.5, from 5.1 in September.
- The region's PPI for August is also due out today; PPI is likely to come in at 7.9% y/y, from 5.8% y/y in July.
- The Eurozone retail sales for August are scheduled for release tomorrow and are expected to have increased by 1.0% y/y, following a 0.6% y/y increase in July.
- The US ISM services PMI for September is due out today and is likely to have slipped to 55.0, from 55.4 in August.
- The trade balance is due out tomorrow; the deficit is likely to have widened in August, to -$102bn, from -$88.6bn in July.
- Exports likely increased less than imports in August.
- The University of Michigan's consumer sentiment index for October is scheduled for release on Friday; sentiment likely slipped to 47.7 in October, from 48.1 in September.
- Locally, the industry-wide PMI for September is due out later today; the index is currently in expansion, at 50.5.
- The SARB's gross and net reserves for September are scheduled for release on Wednesday.
- Gross reserves increased to $75.95bn in August, from $73.45bn in July, while net reserves increased to $73.69bn in August, from $71.76bn in July.
- Manufacturing production for August is due out Thursday; production likely increased by 0.4% y/y in August, following a 1.1% y/y increase in July.
- Production increased by 2.2% m/m in July.
- Brent crude is down this morning, and up by 66.8% year-to-date.
- The gold price is down this morning, and down by 4.3% year-to-date.
- Brent crude oil is currently at $101.45/bbl; ($102.25/bbl*).
- Gold is at $4134/oz ($4141/oz*).
- SA CDS 142bps*, Brazil 128bps* and Turkey 256bps*.
- Yields: US 10yr at 5.27%*, German bund at 3.46%*, SA 10-year generic at 9.03%*, SA's R2035 at 8.82%*.
* Denotes Friday's close.
Key events and data:
- 09h15: SA S&P Global industry-wide PMI (September)
- 10h00: Eurozone S&P Global services and composite PMI (September – final)
- 10h30: Eurozone Sentix investor confidence (October)
- 10h30: UK S&P Global services and composite PMI (September – final)
- 11h00: Eurozone PPI (August)
- 15h45: US S&P Global services and composite PMI (September – final)
- 16h00: US ISM services PMI (September)
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