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In the loop 14 November 2023

In the loop

Shireen Darmalingam

What you should know this morning:

  • The rand is weaker this morning, at R18.74/$, after closing unchanged yesterday (R18.72/$*).
  • EM currencies were mixed yesterday; the RUB (+0.8%), MXN (+0.2%) and HUF (+0.1%) were the biggest gainers, the CLP (-1.1%), KRW (-0.6%) and THB (-0.3%) were the biggest losers.
  • Asian equity markets are mixed this morning; the Nikkei is up, while the Hang Seng and Shanghai Composite are down. 
  • In the US, CPI for October is expected to have moderated to 3.3% y/y, from 3.7% y/y in September.
  • On a m/m basis, CPI is likely to come in at 0.1% in October, after having increased by 0.4% in September.
  • This moderation is expected on the back of declining global energy prices.
  • Core CPI is expected to have remained unchanged in October, at 4.1% y/y.
  • Today’s data could support the case for the Fed to keep the Fed funds rate steady at the last FOMC meeting for this year, on 12-13 December.
  • The NFIB small business optimism, also due out today, is likely to have remained depressed in October, after dipping in September.
  • The September reported highlighted that owners expected business conditions to deteriorate amid a weaker sales outlook and reduced profit margins.
  • Small business owners have been struggling to fill positions due to a limited pool of qualified workers.
  • UK jobs data will likely offer further evidence of labour demand cooling and wage pressures softening. 
  • The Office for National Statistics (ONS) has suspended the release of the Labour Force Survey (LFS) data temporarily due to a lower response rate.
  • The release of the LFS will resume in December with estimates for unemployment, employment, and inactivity.
  • The upcoming release should, however, provide enough data to reassure the central bank that policy is working.
  • Vacancies are likely to have continued their downtrend in October, while employment is expected to have fallen.
  • The unemployment rate is expected to have remained unchanged, at 4.2%, in the three months to October.
  • The German ZEW survey expectations for November are due out today and likely increased to 5.0, from -1.1 in October.
  • The current conditions component of the index was under pressure in October, which highlights the risk of growth struggling to pick up pace in the short term.
  • Locally, Stats SA’s Quarterly Labour Force Survey (QLFS) is scheduled for release today; the unemployment rate is likely to have slipped to 32.5% in Q3:23, from 32.6% in Q2:23.
  • Eskom: Stage 1 loadshedding is currently in place until 4pm, Stage 3 loadshedding will be implemented then until 5am tomorrow.
  • Brent crude oil is up this morning, and down by 3.6% year-to-date.
  • The gold price is down this morning, and up by 6.6% year-to-date.
  • Brent crude oil is currently at $82.85/bbl; ($82.52/bbl*).
  • Gold is at $1944/oz ($1945/oz*).
  • SA CDS 266bps*, Brazil 166bps* and Turkey 379bps*.
  • Yields: US 10yr at 4.64%*, German bund at 2.71%* and SA 10-year generic at 11.70%*, SA’s R2030 at 10.41%*.

* Denotes yesterday’s close. 

Key events and data: 

  • 09h00: UK jobless claims (October), average weekly earnings (September)
  • 11h30: SA unemployment rate (Q3:23)
  • 12h00: Germany ZEW Survey Expectations (November), GDP (Q3:23), employment (Q3:23)
  • 13h00: US NFIB small business optimism (October)
  • 15h30: US CPI (October)

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