In the loop 09 October 2024

In the loop

Shireen Darmalingam

What you should know this morning:

The rand is stronger this morning, at R17.54/$, after closing weaker yesterday (R17.58/$*).
EM currencies were mixed yesterday; the HUF (+0.8%), PLN (+0.4%) and IDR (+0.2%) were the biggest gainers; the ZAR (-1.2%), BRL (-0.8%) and RUB (-0.8%) were the biggest losers.
Asian equity markets are mixed this morning; the Nikkei is up, while the Hang Seng and Shanghai Composite are down.

Central bank watch: the central bank of India and New Zealand met today to decide on monetary policy.
The Reserve Bank of India (RBI) kept the repurchase rate on hold, at 6.5%.
The RBI noted a change in its policy stance to “neutral”, opening the door to rate cuts in the coming months.
The Reserve Bank of New Zealand (RBNZ) cut its official cash rate by 50bps, to 4.75%, today.
The RBNZ commented that this cut comes as policymakers have become more concerned about the economic slowdown.
The central bank noted future changes to the policy rate as depending on the bank’s “evolving assessment of the economy”.

The US FOMC meeting minutes of the September meeting will take centre stage today.
Investors will watch for clues on whether the Fed will cut rates further at the 7 November FOMC meeting.
Recall, the FOMC voted 11 to 1 to lower the Fed funds rate by 50bps, to a range of 4.75% to 5%, at the September policy meeting.
The Fed noted at that meeting its commitment to “supporting maximum employment”, in addition to bringing inflation back to its target.

Boston Fed President Susan Collins commented yesterday that the Fed should adopt a careful, data-dependent approach as they lower interest rates to help preserve the strength of the economy.
Collins highlighted that recent data showed that the US labour market “is in a good place overall”.
There is also now more confidence that inflation will return to the Fed’s 2% target in a “timely” manner.
Fed Vice Chair Philip Jefferson commented that risks to the Fed’s employment and inflation goals are now more balanced.
Jefferson added that “he’ll be assessing incoming economic data and the balance of risks when considering additional adjustments to the federal funds target range”.

Brent crude oil is currently at $77.75/bbl; ($77.18/bbl*).
Gold is at $2623/oz ($2609/oz*).
SA CDS 180bps*, Brazil 148bps* and Turkey 277bps*.
Yields: US 10yr at 4.01%*, German bund at 2.24%*, SA 10-year generic at 10.39%*, SA’s R2035 at 10.46%*.

* Denotes yesterday’s close.

Key events and data:

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