In the loop

What you should know this morning:

• The rand is weaker this morning, at R17.88/$, after closing stronger yesterday (R17.86/$*).
• EM currencies were mixed yesterday; the HUF (+0.7%), CZK (+0.7%) and ZAR (+0.6%) were the biggest gainers; the CLP (-1.5%), RUB (-0.9%) and TWD (-0.4%) were the biggest losers.
• Asian equity markets are mixed this morning; the Nikkei is down, while the Hang Seng and Shanghai Composite are up.

• Central Bank watch: Bank Negara Malaysia is likely to hold its overnight policy rate at 3.00% today.

• The US Fed Beige Book highlighted US economic activity as flat or declining across most regions in recent weeks.
• The report also noted that employment levels were generally “flat to up slightly”, with several firms noting the need to cut shifts and hours.
• The Fed said that “employers were more selective with their hires and less likely to expand their workforces, citing concerns about demand and an uncertain economic outlook”.
• The Fed pointed out that prices and wages increased modestly during the period under review.

• Atlanta Fed President Raphael Bostic commented yesterday that the Fed’s two mandates, namely stable prices and maximum employment, are now in balance for the first time since 2021.
• He nonetheless noted being hesitant to declare that the fight against inflation as over.
• Bostic added that, while inflation has moderated meaningfully, “risks to meeting our price stability mandate remain”.
• Bostic is of the view that the Fed needs to ensure that those risks continue to recede.
• He also noted some risk to the labour market, should the Fed wait until inflation is at the bank’s 2% target before reducing policy restriction.
• San Francisco Fed President Mary Daly noted that the Fed needs to cut interest rates to keep the labour market healthy.
• Daly added the pace of rate cuts as depending on incoming economic data.

• The US private sector ADP employment report for August is due out today.
• Private payrolls are likely to have improved in August.
• Investors are also keeping an eye on the non-farm payrolls (NFP) for August, due out on Friday, which likely increased, by 165k, following an increase of 114k in July.

• The UK Decision Maker Panel (DMP) 3m and 1yr inflation expectations for August will be in focus today.
• The 3m ahead inflation expectations are expected to come in at 3.5% in August, from 3.7% in July.
• One-year ahead inflation expectations are expected to have increased to 2.6% in August, from 2.5% in July.

• Locally, the current account for Q2:24 is on the cards today; the deficit is likely to have narrowed to 1.0% of GDP in Q2:24, from a deficit of 1.2% of GDP in Q1:24.
• Electricity production and consumption for July are scheduled for release today.

• Brent crude is up this morning, and down by 5.3% year-to-date.
• The gold price is down this morning, and up by 21.0% year-to-date.

• Brent crude oil is currently at $72.95/bbl; ($72.70/bbl*).
• Gold is at $2495/oz ($2496/oz*).
• SA CDS 189bps*, Brazil 156bps* and Turkey 281bps*.
• Yields: US 10yr at 3.75%*, German bund at 2.22%*, SA 10-year generic at 10.41%*, SA’s R2030 at 9.03%*.

* Denotes yesterday’s close.

Key events and data:

• 10h30: UK Decision Maker Panel (DMP) 3m and 1 yr inflation expectations (August)
• 11h00: SA current account (Q2:24)
• 11h00: Eurozone retail sales (July)
• 13h00: SA electricity production and consumption (July)
• 14h15: US ADP employment report (August), initial jobless claims (31 July)
• 15h45: US S&P Global services and composite PMI (August – final)
• 16h00: US ISM services (August)

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