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In the loop 20 June 2022

In the loop

Shireen Darmalingam

What you should know this morning:

  • The rand is stronger this morning, at R15.99/$, after closing weaker on Friday (R16.01/$*).
  • EM currencies were mixed on Friday; the PLN (+0.5%), MXN (+0.4%) and the RUB (+0.3%) were the biggest gainers; the BRL (-1.9%), CLP (-1.0%) and HUF (-0.7%) were the biggest losers.
  • Asian equity markets are mixed this morning; the Nikkei is down, while the Hang Seng and Shanghai Composite are up.   
  • The Fed's Christopher Waller indicated that he would support a further 75 bps rate increase at the FOMC meeting in July should US economic data meet expectations. 
  • He called US recession fears "a bit overblown". 
  • Janet Yellen said that "unacceptably high" prices are likely to persist this year but strong personal finances should help prevent a US recession.   
  • Fed Chair Jerome Powell testifies before lawmakers this week and is likely to provide a detailed explanation for last week's 75 bps increase in rates
  • He is also likely to face questions on quantitative easing.
  • Several Fed policymakers, including Charles Evans, Patrick Harker and James Bullard, will speak this week.
  • BOE policymakers too will speak this week.
  • US existing home sales for May data (tomorrow) may show softness in the US housing market. 
  • New homes sales data for May are also due this week. 
  • The University of Michigan consumer sentiment index is due out on Friday. 
  • The central banks of Brazil and Chile will release minutes of their latest MPC meetings this week. 
  • The Bank of Mexico is likely to hike rates this week.
  • Turkey’s central bank will meet on Thursday and is expected to keep rates unchanged.
  • Eurozone and UK PMIs for June (on Thursday) may show further weakening in their respective manufacturing and services sectors. 
  • Germany's Ifo survey and UK retail sales are due out on Friday.
  • SA has the 30th highest Covid caseload, at 3.986 million; 995 new cases were reported yesterday.
  • 18.271 million people, or 45.91% of the SA adult population, have been fully vaccinated.
  • The SARB leading indicator for April is due out this week; the index increased to 128 pts in March, from 127.2 pts in February.
  • CPI for May is due out on Wednesday and likely breached the upper limit of the target band by rising to 6.1% y/y, from April’s increase of 5.9% y/y.
  • On a m/m basis, CPI likely increased by 0.3% in May, from an increase of 0.6% in April.
  • Brent crude oil is up this morning, and up by 45.5% year-to-date.
  • The gold price is up this morning, and up by 0.8% year-to-date.
  • Brent crude oil is currently at $113.16/bbl; ($113.12/bbl*).
  • Gold is at $1843/oz ($1839/oz*).
  • SA CDS 288bps*, Brazil 283bps* and Turkey 826bps*.
  • Yields: US 10yr at 3.22%*, German bund at 1.66%* and SA 10-year generic at 10.69%*, SA’s R186 at 8.67%*.

* Denotes Friday’s close.

Key events and data: 

  • No data releases.

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