In the loop 06 May 2024

In the loop

Shireen Darmalingam

What you should know this morning:

The rand is weaker this morning, at R18.52/$, after closing stronger on Friday (R18.51/$*).
EM currencies were mixed on Friday; the RUB (+1.9%), KRW (+0.9%) and BRL (+0.8%) were the biggest gainers; the MXN (-0.3%), COP (-0.2%) and ARS (-0.1%) were the biggest losers.
Asian equity markets are mixed this morning; the Nikkei is down, while the Hang Seng and Shanghai Composite are up.

Central bank monetary policy decisions are expected from Australia and Malaysia this week.
The Reserve bank of Australia (RBA) will likely keep its benchmark mark interest rate on hold tomorrow, after signalling a dovish tilt at its last meeting.
Bank Negara Malaysia will meet on Thursday and is also expected to keep its policy rate steady.
Rates currently appear to be at a neutral level, supporting the Malaysian economy without stoking inflation.
China’s credit and export data will be released this week.
Japan’s wage data for March will likely show wage growth having accelerated to a solid pace near 2%.

The UK’s BOE will meet on Thursday and is expected to hold interest rates steady.
With inflation set to fall close to 2% imminently, the policy decision may see more votes for a cut at this meeting.
Investors will keep a close eye on comments from the governor for clues on when the bank may start its rate cutting cycle.
The central bank will also publish new forecasts on inflation and growth.
The UK GDP for Q1:24 is due out on Friday and is expected to signal this economy as recovering from a protracted period of stagnation.
Sweden’s Riksbank will meet on Friday and is also expected to keep rates unchanged.
The central bank might signal that it could start cutting rates at its June policy meeting.
The National Bank of Poland (NBP) will also meet this week (Thursday) to decide on rates and too is largely expected to keep rates on hold.
The NBP is likely to signal that the reference rate will remain unchanged until at least Q4:24.

It’s a relatively quiet week in terms of US economic data releases this week.
The University of Michigan survey, due out on Friday, will likely show that consumer sentiment deteriorated in early May.
The sentiment index is likely to have slipped to 76.2 in May, from 77.2 in April.

Locally, the industry-wide PMI for April is due out today; the index is currently below the 50pt benchmark, at 48.4.
Gross and net reserves for April are scheduled for release on Wednesday.
Gross reserves were at $62.32 in March, while net reserves were at $57.51 in March.
Manufacturing production for March is due out on Thursday; production is expected to have increased by 0.8% y/y in March, after having increased by 4.1% y/y in February.
On a m/m basis, manufacturing production is likely to have increased by 0.6% in March, following a decline of 0.3% in February.

Brent crude oil is currently at $83.30/bbl; ($82.96/bbl*).
Gold is at $2311/oz ($2301/oz*).
SA CDS 230bps*, Brazil 139bps* and Turkey 289bps*.
Yields: US 10yr at 4.50%*, German bund at 2.49%*, SA 10-year generic at 11.91%*, SA’s R2030 at 10.60%*.

* Denotes Friday’s close.

Key events and data:

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