In the loop 01 October 2024

In the loop

Shireen Darmalingam

What you should know this morning:

The rand is weaker this morning, at R17.26/$, after closing weaker yesterday (R17.21/$*).
EM currencies were mixed yesterday; the THB (+0.7%), RUB (+0.3%) and MXN (+0.3%) were the biggest gainers; the COP (-0.7%), ZAR (-0.6%) and CZK (-0.4%) were the biggest losers.
Asian equity markets: the Nikkei is up, while Chinese markets are closed for the rest of this week.

Japan’s Jibun Bank manufacturing PMI dipped to 49.7 in September (final estimate), from 49.8 in August.
Output and new orders contracted due to a weak economy and lacklustre overseas demand.

Eurozone CPI for September is in the spotlight today; headline CPI is likely to come in below the ECB’s 2% inflation target (for the first time since 2021), at 1.8% y/y in September, from 2.2% y/y in August.
This moderation is expected to have been driven by fuel costs in September; prices at the pump fell 3.0% y/y in September.
On a m/m basis, CPI is likely to have come in at 0% in September, after having increased by 0.1% in August.
Core and services measures are also likely to have declined, albeit slightly, in September.
Core CPI is expected to come in at 2.7% y/y in September, from 2.8% y/y in August.

US Fed Chair Jerome Powell commented yesterday that the Fed would be lowering the Fed funds rate “over time”.
He emphasized the Fed as confident of inflation continuing to move toward the Fed’s 2% target.
He added that economic conditions “set the table” for a further easing of price pressures.
Powell reiterated the US economy as remaining on a solid footing.
Powell also noted the Fed as “not on any preset course” with regard to interest rates.
Policy decisions will be made on a meeting-to-meeting basis, and all incoming economic data will be considered.

The US Job Openings and Labour Turnover Survey (JOLTS) job openings for August, scheduled for release today, are likely to have moved sideways.
The August JOLTS likely come in at 7.673 million, unchanged from July.
The data comes ahead of the non-farm payrolls (NFP), due out on Friday; payrolls are expected to have increased, by 150k, following an increase of 142k in July.
The US ISM manufacturing index for September is also on the cards today; an increase is expected on the back of improvements in new orders, production and backlogs.
The manufacturing PMI is likely to have increased to 47.5 in September, from 47.2 in August.

Locally, the BER manufacturing PMI for September is due for release today; the index slipped to 43.6 in August, from 52.4 in July.
The September Naamsa vehicle sales are also due out tomorrow; vehicle sales likely declined by 1.7% y/y in September, after having fallen by 4.9% y/y in August.

Brent crude oil is currently at $71.79/bbl; ($71.77/bbl*).
Gold is at $2642/oz ($2639/oz*).
SA CDS 177bps*, Brazil 152bps* and Turkey 269bps*.
Yields: US 10yr at 3.78%*, German bund at 2.12%*, SA 10-year generic at 9.95%*, SA’s R2035 at 10.03%*.

* Denotes yesterday’s close.

Key events and data:

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