In the loop 16 July 2024

In the loop

Christelle Grobler

What you should know this morning:

The rand is trading at R18.24/$ this morning, after closing weaker yesterday (R18.22/$*).
EM currencies were mixed yesterday; the ZAR (-1.5%), MXN (-1.0%) and COP (-0.7%) lost the most; the HUF (+0.2%) and PEN (+0.2%) gained the most.
Asian equity markets are mixed this morning; the Nikkei is up, while the Hang Seng and the Shanghai Composite are down.

Japan’s tertiary industry index declined unexpectedly in May.
The index dropped 0.4% m/m in May, after registering an (upwardly revised) expansion of 2.2% m/m in April.
A contraction in the services industries was the main driver of the drop in the index.
The services index declined 0.5% m/m in May; trade remained strong, however, rising 1.0% m/m in May.

Fed Chair Jerome Powell noted in Washington that inflation and economic activity had slowed, broadly in line with the central bank's expectation.
He commented that data on price pressures between April and June "do add somewhat to confidence" that inflation will return to the Fed's target.
Powell did not, however, give any hints of an imminent rate cut at the FOMC meeting, 30-31 July.
"I'm not going to be sending any signals one way or another on any particular meeting," Powell said. "We're going to make these decisions meeting by meeting."
US retail trade sales data for June is due out today.
Retail trade is expected to have been under pressure, with sales likely declining 0.3% m/m in June.
The NAHB housing index for July will also be released today.

Today sees the release of the July ZEW expectations for the Eurozone.
Sentiment improved during June, with the index rising to 51.3.
The Eurozone trade balance for May is also on the cards.
The International Monetary Fund (IMF) will release its July World Economic Update later today.
In April, the IMF projected real global GDP growth to remain steady at 3.2% in 2024 and 2025.

Locally, no major data releases are scheduled for today.
The Minister of Public Works and Infrastructure will set out plans for infrastructure development in South Africa and Africa at the 2024 Infrastructure Africa forum which starts today in Cape Town.
The State of the Nation Address (SoNA) on Thursday evening will be keenly watched to get a sense of the government of national unity’s (GNU) policy plans.

Brent crude oil is currently at $84.57/bbl; ($84.85/bbl*).
Gold is at $2432/oz ($2430/oz*).
SA CDS 196bps*, Brazil 149bps* and Turkey 256bps*.
Yields: US 10yr at 4.23%*, German bund at 2.47%*, SA 10-year generic at 10.79%*, SA’s R2030 at 9.55%*.

* Denotes yesterday’s close.

Key events and data:

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