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In the loop 04 September 2024

In the loop

Shireen Darmalingam

What you should know this morning:

  • The rand is weaker this morning, at R17.98/$, after closing weaker yesterday (R17.96/$*).
  • EM currencies were largely down yesterday; the CLP (-1.3%), HUF (-0.8%) and ZAR (-0.6%) were the biggest losers; the RUB gained 3.4%.
  • Asian equity markets the Nikkei, Hang Seng and Shanghai Composite are down.
 
  • Central bank watch: the National Bank of Poland will meet today and is largely expected to keep its policy rate unchanged, at 5.75%.
  • The Bank of Canada is set to continue with gradual easing with a 25 bps cut.
 
  • ECB Governing Council member Joachim Nagel noted that the ECB should not declare victory over inflation too soon, even if the moderation in CPI supports the case for another rate cut in September.
  • He urged policymakers to remain vigilant as the bank has not yet reached its inflation target goal.
  • His comments come as more policymakers support the case for the ECB to cut its benchmark interest further on 12 September.
  • ECB Governing Council member Gediminas Simkus commented yesterday that he sees quite a clear case for the ECB to cut rates at the September monetary policy meeting. 
  • He added though that it would be unlikely that the ECB would cut rates further at the October policy meeting.
  • Simkus expects the changes in the latest economic projections to be unsubstantial given that data has broadly been in line with expectations.
 
  • The US Job Openings and Labour Turnover Survey (JOLTS) job openings for July are likely to have fallen further.
  • The July JOLTS print should show openings down, to 8.10 million, from 8.184 million in June.
  • The data comes ahead of the private sector ADP employment report for August, due out tomorrow,
  • Private payrolls are likely to have improved in August.
  • Investors are also keeping an eye on the non-farm payrolls (NFP) for August, due out on Friday, which likely increased, by 165k, following an increase of 114k in July.
  • The Fed’s Beige Book for September is also on the cards today.
  • The Beige Book is likely to show most districts as maintaining slight to modest growth in economic activity.
 
  • Locally, the industry-wide PMI for August is due out today; the index is currently below the 50pt benchmark, at 49.3.
  • The BER will release the Q3:24 business confidence data; the index improved to 35 in Q2:24.
 
  • Brent crude is down this morning, and down by 4.7% year-to-date.
  • The gold price is up this morning, and up by 21.0% year-to-date.
 
  • Brent crude oil is currently at $73.39/bbl; ($73.75/bbl*).
  • Gold is at $2495/oz ($2486/oz*).
  • SA CDS 188bps*, Brazil 157bps* and Turkey 282bps*.
  • Yields: US 10yr at 3.83%*, German bund at 2.27%*, SA 10-year generic at 10.54%*, SA’s R2030 at 9.19%*.
 

* Denotes yesterday’s close.

Key events and data:

  • 09h15: SA S&P Global industry-wide PMI (August)
  • 10h00: Eurozone HCOB services and composite PMI (August – final)
  • 10h30: UK S&P Global services and composite PMI (August – final)
  • 11h00: Eurozone PPI (July)
  • 12h00: SA BER business confidence index (Q3:24)
  • 13h00: US MBA mortgage applications (30 August)
  • 14h30: US trade balance (July)
  • 16h00: US JOLTS job openings (July), factory orders (July), durable goods orders (July – final)
  • 20h00: US Federal Reserve Beige Book
 

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