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In the loop 07 June 2024

In the loop

Shireen Darmalingam

What you should know this morning:

  • The rand is weaker this morning, at R18.93/$, after closing stronger yesterday (R18.92/$*).
  • EM currencies were mixed yesterday; the BRL (+0.8%), THB (+0.6%) and PLN (+0.5%) were the biggest gainers; the PEN (-0.2%), INR (-0.1%) and COP (-0.1%) were the biggest losers.
  • Asian equity markets the Nikkei, Hang Seng and Shanghai Composite are down.
  • The Reserve Bank of India today kept its benchmark interest rate steady, at 6.5%.
  • Reserve Bank governor noted that policymakers should remain vigilant on inflation risks.
  • The Bank of Russia will meet today and will likely keep its benchmark interest rate unchanged, at 16%.
  • The US non-farm payrolls (NFP) for May, due out today, likely increased, by 180k, following an increase of 175k in April.
  • Average hourly earnings likely increased by 0.3% m/m in May, following a 0.2% 
  • The unemployment rate is likely to have remained unchanged in May, at 3.9%.
  • The Fed will keep a close eye on the data ahead of its FOMC meeting on 12 June to assess the tightness of the US labour market.
  • The Fed is largely expected to hold rates steady at that meeting.
  • Several ECB policymakers are due to speak on the economy and monetary policy today following the ECB’s decision to cut interest rates yesterday.
  • ECB President Christine Lagarde noted yesterday that she would caution against assuming that there would be another interest rate cut in July. 
  • Lagarde stressed that the next interest rate move would still be data-dependent.
  • Locally, the SARB’s gross and net reserves for May are scheduled for release today.
  • Gross reserves were $61.80bn in May, while net reserves were $57.85bn in May.
  • President Cyril Ramaphosa announced yesterday that the ANC will be inviting other political parties to form a government of national unity (GNU).
  • Ramaphosa noted that establishing a GNU was the most viable, effective and powerful way to meet the expectations of all South Africans at this critical juncture.
  • Eskom: loadshedding remains suspended until further notice.
  • Brent crude is up this morning, and up by 3.9% year-to-date.
  • The gold price is up this morning, and up by 15.5% year-to-date.
  • Brent crude oil is currently at $80.07/bbl; ($79.87/bbl*).
  • Gold is at $2381/oz ($2372/oz*).
  • SA CDS 239bps*, Brazil 144bps* and Turkey 259bps*.
  • Yields: US 10yr at 4.29%*, German bund at 2.54%*, SA 10-year generic at 12.09%*, SA’s R2030 at 10.62%*.

* Denotes yesterday’s close.

Key events and data:

  • 08h00: SA gross and net reserves (May)
  • 10h00: Eurozone GDP (Q1:24 – final)
  • 14h30: US non-farm payrolls (May), unemployment rate (May)
  • 21h00: US consumer credit (April)

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