In the loop 07 November 2024

In the loop

Shireen Darmalingam

What you should know this morning:

The rand is stronger this morning, at R17.58/$, after closing weaker yesterday (R17.63/$*).
EM currencies were mixed yesterday; the BRL (+1.2%), RUB (+0.6%) and TRY (+0.3%) were the biggest gainers; the HUF (-2.0%), RON (-1.8%) and BGN (-1.8%) 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 watch: the US FOMC meeting is in the spotlight today; the Fed is largely expected to cut the Fed funds rates by 25 bps.
Investors will keep an eye out for signals of further rate cuts.
The UK’s BOE will meet today and will likely cut its benchmark interest rate by 25 bps, to 4.75%.
The BOE is also expected to release new forecasts today, which are likely to show faster growth in 2025 and 2026.
The Swedish Riksbank is expected to cut rates today, by 50 bps, to 2.75%.
A cut of this magnitude would match the Riksbank’s risk scenario from previous guidance.

The UK Decision Maker Panel (DMP) 3m and 1yr inflation expectations for October will also be in focus today.
One-year ahead inflation expectations are expected to have remained unchanged, at 2.7%, in October.
The 3m ahead inflation expectations came in at 3.6% in September.

ECB Governing Council member Francois Villeroy de Galhau commented yesterday that the Donald Trump victory as US president raises risks and uncertainty for the global economy and should encourage Europe to address its weaknesses.
He highlighted that Trump’s policies would fuel deficits and increase borrowing costs in the long term, should they be implemented.
He added that more protectionism with increased tariffs would also fuel inflation in the US and harm growth elsewhere in the world.
De Galhau also said that the region needs to do more to catch up on technological investment and overcome its political divisions.
With the Trump win, European Central Bank Vice President Luis de Guindos also warned the global economy faces potentially detrimental shocks to growth and inflation.
He noted that the ECB would incorporate whatever policies will be announced by the new US administration into its outlook – and then decide how to react.

Locally, the SARB’s gross and net reserves for October are scheduled for release today.
Gross reserves were $63.63bn in September, while net reserves were $61.03bn in September.
Electricity production and consumption for September are also scheduled for release today.

Brent crude oil is currently at $75.39/bbl; ($74.92/bbl*).
Gold is at $2658/oz ($2663/oz*).
SA CDS 191bps*, Brazil 159bps* and Turkey 262bps*.
Yields: US 10yr at 4.43%*, German bund at 2.40%*, SA 10-year generic at 10.58%*, SA’s R2035 at 10.58%*.

* Denotes yesterday’s close.

Key events and data:

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