In the loop
What you should know this morning:
- The rand is stronger this morning, at R15.92/$, after closing weaker yesterday (R16.00/$*).
- EM currencies were mostly down yesterday; the COP (-2.2%), CLP (-1.8%) and the HUF (-1.5%) were the biggest losers, while the MXN (+0.2%) and IDR (+0.2%) gained.
- Asian equity markets the Nikkei, Hang Seng and Shanghai Composite are up this morning.
- The US composite PMI dropped to a five-month low of 51.2 in June, from 53.6 in March.
- Forward-looking elements, such as new orders for goods and services, signal tougher times to come; price indicators however rose at a softer pace.
- US banks have passed the Fed’s annual stress test, which was more stringent than before.
- The Fed said that capital levels were strong enough for US banks to continue lending, even in the event of a severe recession.
- UK GfK consumer confidence dropped one point, to -41 in June.
- This is the lowest level on record since the measurement of consumer perceptions of personal finance and general economic conditions began in 1974.
- Prices still rising faster than wages, as well as expectations of a recession, proved a further hit to confidence in June.
- UK retail sales, due this morning, likely contracted 0.7% m/m in May; this is a y/y decline of 4.5%.
- The G7 Summit will start on Sunday against the backdrop of economists on both sides of the Atlantic further revising growth forecasts downwards.
- Many fear that the odds of a recession in the US and Europe have increased notably.
- There are no local data releases due today.
- Eskom will continue with Stage 2 loadshedding until midnight.
- Brent crude oil is largely flat this morning, and up by 41.5% year-to-date.
- The gold price is down this morning, and down by 0.2% year-to-date.
- Brent crude oil is currently at $110.06/bbl; ($110.05/bbl*).
- Gold is at $1825/oz ($1830/oz*).
- SA CDS 285bps*, Brazil 294bps* and Turkey 800bps*.
- Yields: US 10yr at 3.09%*, German bund at 1.43%* and SA 10-year generic at 10.58%*, SA’s R186 at 8.59%*.
* Denotes yesterday’s close.
Key events and data:
- 08h00: UK retail sales (May)
- 09h00: China current account balance (Q1:22 – final)
- 16h00: US University of Michigan consumer sentiment, 1 yr and 5-10 yr (June – final)
- 16h00: US new home sales (May)