In the loop 20 November 2023

In the loop

Shireen Darmalingam

What you should know this morning:

The rand is stronger this morning, at R18.25, after closing stronger on Friday (R18.35/$*).
EM currencies were mixed on Friday; the THB (+1.1%), TWD (+0.5%) and BGN (+0.5%) were the biggest gainers, the BRL (-0.8%), CLP (-0.4%) and RUB (-0.3%) were the biggest losers.
Asian equity markets are mixed this morning; the Nikkei is down, while the Hang Seng and Shanghai Composite are up.

In Asia, Japan’s CPI for October is scheduled for release on Friday and will likely confirm cost-push inflation as picking up again.
CPI is expected to come in at 3.4% y/y in October, from 3.0% y/y in September.
Core CPI is expected to come in at 2.9% y/y in October, from 2.8% y/y in September.
After October’s surprise hike, Bank Indonesia will probably leave rates unchanged this Thursday.
The Central Bank of Sri Lanka will likely cut its key rates this Friday.

UK Chancellor of the Exchequer Jeremy Hunt is due to announce the Autumn Statement on Wednesday.
He is likely to have limited scope to ease fiscal policy meaningfully in this budget.
The ECB’s October monetary policy meeting minutes, due out on Thursday, will be closely watched for any lingering support for additional tightening.
Several central banks will meet this week to decide on rates.
Sweden’s Riksbank is likely to keep rates on hold, at 4.0%.
Turkey’s central bank will meet on Thursday and will likely hike its benchmark interest rate by 250 bps, to 37.5%.
The Eurozone composite PMI for November, due out on Thursday, will provide further insight into the extent to which downside risks to the economy from monetary tightening have been materialising.
The UK composite PMI for November, also due out on Thursday, is expected to remain in recessionary territory for a fourth consecutive month.

The US FOMC minutes of the 31 October to 1 November meeting are scheduled for release on Wednesday.
The minutes will likely shed light on why the policy statement and Fed Chair Jerome Powell’s comments were relatively dovish despite strong economic data.
Existing home sales for October, due out on Tuesday, likely declined in October after pending home sales, which leads existing sales by a month or two, declined by an average of 3% from August to September.
The University of Michigan sentiment index for November is due out on Wednesday; sentiment is likely to have increased.
US markets are closed for the Thanksgiving holiday on Thursday.

Locally, the October CPI is due out on Wednesday and is expected to come in at 5.6% y/y, from 5.4% y/y in August.
Core CPI is expected to come in at 4.2% y/y in October, from 4.5% y/y in September.
The SARB will meet this week to decide on monetary policy and is largely expected to keep the repo rate unchanged, at 8.25%.
The SARB’s leading indicator for September is scheduled for release tomorrow; the index increased to 110.9 in August.
The BER’s business index for Q4:23 is also on the cards tomorrow; the index is likely to have increased to 38, from 33 in Q3:23.
Eskom: Stage 2 loadshedding is currently in place until 4pm; Stage 3 will be implemented then until 5am tomorrow.

Brent crude oil is currently at $81.16/bbl; ($80.61/bbl*).
Gold is at $1982/oz ($1980/oz*).
SA CDS 241bps*, Brazil 153bps* and Turkey 345bps*.
Yields: US 10yr at 4.43%*, German bund at 2.58%* and SA 10-year generic at 11.32%*, SA’s R2030 at 10.05%*.

* Denotes Friday’s close.

Key events and data:

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