In the loop 22 November 2023

In the loop

Shireen Darmalingam

What you should know this morning:

The rand is weaker this morning, at R18.63, after closing weaker yesterday (R18.59/$*).
EM currencies were mixed yesterday; the TWD (+0.7%), CLP (+0.7%) and RUB (+0.4%) were the biggest gainers, the TRY (-1.1%), ZAR (-0.9%) and INR (-0.9%) were the biggest losers.
Asian equity markets are mixed this morning; the Nikkei is up, while the Hang Seng and Shanghai Composite are down.

The US FOMC minutes of the 31 October to 1 November meeting noted policymakers as in agreement about a cautious approach to further rate hikes.
The minutes suggest Fed policymakers as inclined to keep interest rates elevated for "some time" to fight inflation.
The committee recognised the impact that rate hikes have had on inflation while being mindful to make sure they “got the job done”.
The committee will be basing any further tightening on progress towards the inflation goal.
The minutes emphasized higher interest rates as starting to squeeze households and businesses.

US existing home sales declined more than expected in October, by 4.1% m/m, to a lowest since August 2020, after having declined by a downwardly revised 2.2% m/m in September.
Existing home sales fell to a seasonally adjusted annual rate of 3.79 million in October, from 3.95 million September.
The decline highlights the toll elevated mortgage rates and high inflation continues to take on existing homes sales.
However, mortgage rates are expected to come down as the Fed nears the end of its tightening cycle.
This offers some hope that the housing market may be bottoming out.

UK Chancellor of the Exchequer Jeremy Hunt is due to announce the Autumn Statement today.
He is likely to have limited scope to ease fiscal policy meaningfully in this budget.
Hunt is largely expected to announce policies that are focused on boosting the economy’s supply potential.

Locally, the October CPI is due out today and is expected to come in at 5.6% y/y, from 5.4% y/y in August.
On a m/m basis, CPI is likely to have increased by 0.6% m/m, matching September’s increase.
Core CPI is expected to have moderated to 4.2% y/y in October, from 4.5% y/y in September.
Eskom: Stage 4 loadshedding is currently in place until further notice.

Brent crude oil is currently at $82.43/bbl; ($82.45/bbl*).
Gold is at $1998/oz ($2001/oz*).
SA CDS 236bps*, Brazil 147bps* and Turkey 336bps*.
Yields: US 10yr at 4.39%*, German bund at 2.56%* and SA 10-year generic at 11.15%*, SA’s R2030 at 9.89%*.

* Denotes yesterday’s close.

Key events and data:

Read PDF