In the loop 08 November 2023

In the loop

Shireen Darmalingam

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 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:

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