In the loop

What you should know this morning:

• The rand is stronger this morning, at R18.16/$, after closing weaker yesterday (R18.20/$*).
• EM currencies were mixed yesterday; the PEN (+0.3%) and KRW (+0.2%) were the biggest gainers; the MXN (-2.5%), RUB (-1.4%) and ZAR (-0.8%) were the biggest losers.
• Asian equity markets are mixed this morning; the Nikkei and Shanghai Composite are down, while the Hang Seng is up.

• Central bank watch: The Reserve Bank of New Zealand (RBNZ) cut its interest rate by 50 bps, to 4.25%.
• The RBNZ noted that a third large cut in interest rates could be delivered early next year.
• The Central Bank of Sri Lanka has shifted to the overnight policy rate as its benchmark interest rate, transitioning from its dual policy interest rate mechanism.

• The US FOMC meeting minutes of the 6-7 November meeting highlighted that policymakers would prefer future rate cuts to be gradual.
• Policymakers noted that if incoming data were as expected, “it would likely be appropriate to move gradually toward a more neutral stance of policy over time”.
• The committee noted the resilience of the US economy at this meeting.
• In addition, the FOMC also highlighted uncertainty about the neutral rate as a reason for caution, which complicated the assessment of the degree of restrictiveness of monetary policy.
• Estimates of the neutral rate have steadily increased over the past year — but just how close rates may be to such a stance remains unclear.
• Fed Chair Jerome Powell noted earlier in November that the US economy is not sending signals to policymakers that they would need to be hasty in lowering rates. 
• The Fed will gather for the last FOMC meeting of this year on 17-18 December.

• The US Conference Board consumer confidence index increased to 111.7 (the highest in more than a year) in November, from an upwardly revised 109.6 in October.
• The expectations measure for the next six months also increased in November, to 92.3, from an upwardly revised 91.9 in October.
• The present situation index increased to 140.9 in November, from 136.1 in October.
• The improvement comes on the back of optimism about the broader economy and the labour market in the wake of Donald Trump’s re-election as president.
• US new home sales declined significantly more than expected in October, by 17.3% m/m (to 610k annualised), after increasing by an upwardly revised 7.0% m/m in September (to 738k annualised).
• The decline came as two hurricanes hit the south, while affordability continued to weigh on buyers.

• The US Q3:24 GDP (second estimate) is expected to come in at 2.8% q/q, unchanged from the previous estimate, and from 3.0% q/q in Q2:24.
• Personal income and spending for October are also scheduled for release today.
• The Fed will keep an eye on the core PCE deflator, which is expected to have increased by 0.3% m/m in October, following a 0.2% m/m increase in September. 
• Durable goods orders for October are expected to have increased by 0.5% m/m in October, following a 0.7% m/m decline in September.
• Durable goods, excluding transportation, likely moderated slightly in October.

• Locally, it’s a quiet day as far as data releases are concerned.

• Brent crude is up this morning, and down by 5.4% year-to-date.
• The gold price is up this morning, and up by 28.1% year-to-date.

• Brent crude oil is currently at $72.91/bbl; ($72.81/bbl*).
• Gold is at $2642/oz ($2625/oz*).
• SA CDS 185bps*, Brazil 155bps* and Turkey 257bps*.
• Yields: US 10yr at 4.30%*, German bund at 2.18%*, SA 10-year generic at 10.16%*, SA’s R2035 at 10.20%*.

* Denotes yesterday’s close. 

Key events and data:

• 14h00: US MBA mortgage applications (22 November)
• 15h30: US GDP (Q3:24), advance goods trade balance (October), durable goods orders (October), initial jobless claims (23 November)
• 17h00: US personal income and spending (October)

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