In the loop
What you should know this morning:
- The rand is stronger this morning, at R18.35/$, after closing weaker yesterday (R18.38/$*).
- EM currencies were mixed yesterday; the RUB (+0.4%), MXN (+0.2%) and BRL (+0.2%) were the biggest gainers, the CZK (-1.1%), COP (-0.9%) and KRW (-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.
- Several Fed policymakers commented yesterday that they are still trying to assess whether the rise in long-term Treasury yields would help cool the economy enough to curtail the need for further interest rate hikes.
- Some of the hawkish policymakers signalled that the cumulative tightening of financial conditions since July could still have a sufficiently dampening effect on the economy.
- They noted, however, that they need more time to see if such cooling would last.
- Governor Michelle Bowman noted that it was too soon to know what the full effects of the recent rise would be.
- Bowman noted that the Fed might need to raise interest rates higher to contain inflation.
- She noted, however, that the rise in Treasury yields since September has led to tighter financial conditions.
- Dallas Fed President Lorie Logan commented that, while progress had been made with respect to inflation, it is still too high.
- The US trade deficit widened by more than expected in September, to $61.5bn, from a revised $58.7bn in August.
- The widening reflects the resilience of American demand for foreign goods.
- Imports rose to a highest since February; exports increased to a more than one-year high.
- The National Bank of Poland (NBP) today is likely to cut the reference rate by 25 bps, to 5.50%, after a similar reduction in October.
- The cut in rates is expected on the back of moderating inflation.
- Poland’s CPI is expected to moderate to 5.1% by December 2023, from 6.5% currently.
- It is, nonetheless, well above the NBP’s 2.5% target, a level which inflation is unlikely to reach before 2025.
- Eurozone finance ministers are scheduled to meet in Brussels today to discuss fiscal policy in the region.
- Locally, it’s a quiet day as far as data releases are concerned.
- Eskom: daytime loadshedding has been suspended; Stage 2 loadshedding will be implemented at 4pm today.
- Brent crude oil is down this morning, and down by 5.1% year-to-date.
- The gold price is up this morning, and up by 7.8% year-to-date.
- Brent crude oil is currently at $81.56/bbl; ($81.61/bbl*).
- Gold is at $1966/oz ($1964/oz*).
- SA CDS 266bps*, Brazil 168bps* and Turkey 379bps*.
- Yields: US 10yr at 4.56%*, German bund at 2.65%* and SA 10-year generic at 11.65%*, SA’s R2030 at 10.38%*.
* Denotes yesterday’s close.
Key events and data:
- 12h00: Eurozone retail sales (September)
- 14h00: US MBA mortgage applications (3 November)