Closing the loop

Market highlights:

• The rand is weaker at R16.60/$ (R16.46/$*) today; it ranged between R16.43/$ and R16.64/$.
• The currency is above its 50-day, 100-day and 200-day moving averages (R16.24/$, R15.77/$ and R15.63/$).
• EM currencies are mixed today; the RUB (+3.2%), INR (+0.4%) and CNY (0.2%) are the biggest gainers; the COP (-1.2%), MXN (-1.0%) and BRL (-0.9%) are the biggest losers.

• US Job Openings and Labor Turnover Survey (JOLTS) job openings fell to 10.7 million in June, its lowest since September last year, from 11.3 million in May.
• The data signals moderating demand for labour amid growing economic pressures.
• US non-farm payrolls for July, due out on Friday, are expected to have increased by 250k from an increase of 372k in June.
• The unemployment rate is expected to have remained steady at 3.6% in July.

• UK house prices increased by 11% y/y in July after a 10.7% y/y increase in June.
• The increase comes despite rising interest rates, surging inflation and lower affordability.
• Demand continues to be supported by strong labour market conditions.

• Turkey’s CPI for July, scheduled for release tomorrow, is expected to have increased to 80.2% y/y from June’s increase to 78.6% y/y.
• Still, the central bank is unlikely to tighten policy as the political leadership calls for lower rates.

• Brazil’s central bank meets tomorrow and is expected to hike the Selic rate by 50 bps to 13.75%.
• The central bank is also expected to leave the door open for further rate hikes this year as inflation expectations remain unanchored.
• Brazilian inflation has been volatile in recent months.
• Tax cuts on some essential goods and services and two cuts in gasoline prices provided room for CPI to ease.
• The strengthening of the BRL has also provided some relief.
• However, large income transfers may drive prices up again while inflation expectations remain above target.

• Locally, the industry-wide PMI is due out tomorrow; the PMI is expected at 50.5 in July, from 52.5 in June.
• Eskom indicated that Stage 2 loadshedding could be implemented between 16h00 and midnight over the next three days due to a shortage of generation capacity.
• The delay in returning generation units to service at 2 coal-fired power stations and the failure of units at 4 other plants have worsened capacity constraints.

• The oil price is up by 0.3% today, and up by 29% in the year-to-date.   
• The gold price is up by 0.6% today, and down by 2.5% in the year-to-date.

• Brent crude oil is at $100.30/bbl ($100.03/bbl*).
• Gold price is at $1783/oz ($1773/oz*). 
• SA CDS is at 293bps (301bps*), Brazil 282bps (274bps*), Turkey 789bps (822bps*).
• Yields: US 10yr at 2.57% (2.57%*), German bund at 0.75% (0.78%*) and SA 10-year generic at 10.77% (10.90%*), SA’s R186 is at 8.90% (9.04%*).
• The JSE ALSI is down by 1.4% today (-0.4%*).

* Denotes yesterday’s close. 

Key events and data:

• 02h30: Japan Jibun Bank services and composite PMI (July - final)
• 03h45: China Caixin services and composite PMI (July – final)
• 09h00: Turkey CPI, PPI (July)
• 09h15: SA industry-wide PMI (July)
• 10h00: Eurozone S&P Global services and composite PMI (July – final)
• 10h30: UK S&P Global services and composite PMI (July – final)
• 11h00: Eurozone PPI (June), retail sales (June)
• 13h00: US MBA mortgage applications )29 July)
• 15h45: S&P Global services and composite PMI (July – final)
• 16h00: US durable goods, factory orders (June), ISM services (July)
• 23h30: Brazil interest rate decision – 50 bps hike expected

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