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In the loop 24 July 2024

In the loop

Shireen Darmalingam

What you should know this morning:

  • The rand is weaker this morning, at R18.41/$, after closing weaker yesterday (R18.37/$*).
  • EM currencies were mixed yesterday; the TRY (+0.2%), MYR (+0.2%) and THB (+0.2%) were the biggest gainers; the MXN (-1.0%), CZK (-0.8%) and ZAR (-0.6%) were the biggest losers.
  • Asian equity markets are mixed this morning; the Nikkei and Hang Seng are down, while the Shanghai Composite is up.
 
  • The Turkish Central Bank yesterday kept its benchmark interest rate unchanged for a fourth consecutive meeting, at 50%.
  • The central bank noted that, while it has kept rates steady, it remains attentive to inflation risks.
  • Headline CPI came in at 71.6% y/y in June, from 75.4% y/y in May.
  • The bank expects inflation to temporarily increase again in July. 
 
  • The Central Bank of Nigeria has hiked its key interest rate for the 12th straight time, by 50 bps, to 26.75%.
  • The central bank noted that it remains committed to reining in inflation.
  • The bank said that inflation is having a major impact on the economy.
 
  • The Bank of Canada is due to announce its interest rate decision today and is largely expected to cut the benchmark interest rate by 25 bps, to 4.5%. 
  • This expected on the back of the downside surprise in CPI for June and an upside surprise in the unemployment rate.
 
  • US new homes sales for June are expected to have increased by 3.4% m/m (to 640k), following an 11.3% m/m (619k) decline in May.
  • Mortgage rates moderated slightly between May and June, which likely supported prospective buyers to bid on a new home. 
  • Inventories of new homes for sale have also risen to highs not seen since early in 2008.
  • This may have encouraged builders to offer incentives to boost sales.
  • The US S&P Global manufacturing PMI for July is expected to have remained unchanged at 51.6.
 
  • Locally, CPI for June is scheduled for release today and is expected to come in at 5.1% y/y, from 5.2% y/y in May.
  • On a m/m basis, CPI is expected to have increased by 0.1% in June, after having increased by 0.2% in May.
  • Core CPI is likely to have remained unchanged at 4.6% y/y in June; it is expected to have increased by 0.4% m/m in June, following a 0.1% m/m increase in May. 
 
  • Brent crude is up this morning, and up by 5.4% year-to-date.
  • The gold price is up this morning, and up by 17.2% year-to-date.
 
  • Brent crude oil is currently at $81.23/bbl; ($81.01/bbl*).
  • Gold is at $2416/oz ($2405/oz*).
  • SA CDS 197bps*, Brazil 154bps* and Turkey 259bps*.
  • Yields: US 10yr at 4.25%*, German bund at 2.43%*, SA 10-year generic at 10.76%*, SA’s R2030 at 9.44%*.
 

* Denotes yesterday’s close.

Key events and data:

  • 10h00: SA CPI (June)
  • 10h00: Eurozone HCOB manufacturing, services and composite PMIs (July)
  • 10h30: UK S&P Global manufacturing, services and composite PMIs (July)
  • 13h00: US MBA mortgage applications (19 July)
  • 15h45: US S&P Global manufacturing, services and composite PMIs (July)
  • 16h00: US new home sales (June)
 

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