In the loop 20 September 2024

In the loop

Shireen Darmalingam

What you should know this morning:

The rand is weaker this morning, at R17.52/$, after closing stronger yesterday (R17.49/$*).
EM currencies were largely up yesterday; the MYR (+0.7%), IDR (+0.5%) and BRL (+0.4%) were the biggest gainers.
Asian equity markets are mixed this morning; the Nikkei and Hang Seng are up, while the Shanghai Composite is down.

Central bank watch: the BOJ kept its benchmark interest rate unchanged today.
The bank signalled that it sees no need to hurry with interest rate hikes, and noted that it would continue to monitor financial markets after its July increase.
The BOJ upwardly revised its assessment of consumer spending, a key engine of Japan’s economic growth.
It reiterated that it expects price growth to be in line with its goal in the latter half of its forecast period.
This suggests that it remains on a path toward hiking rates.

The UK GfK consumer confidence fell in September by the most in two-and-a-half years, to -20, from -13 in August.
Households turned negative on the outlook for both their personal finances and the UK economy.
The downturn may increase pressure on the BOE to step up the pace of interest rate cuts.
The BOE kept its benchmark interest rate unchanged yesterday.
The central bank emphasized its intention to move steadily on rates to ensure that inflation continues to slow.

The US composite PMI for September is scheduled for release today; the manufacturing PMI is likely to have improved in September, albeit remaining below the 50-pt benchmark.
The manufacturing PMI gauge disappointed by falling further into contraction in August; the manufacturing PMI slipped to 48.0, from 49.6 in July.
This deterioration was driven by further weakness in production, orders and factory employment.
The services PMI is likely to have fallen slightly in September but remain in expansionary territory.

UK retail sales for August are due out today; sales are likely to have increased by 0.4% m/m, after having increased by 0.5% m/m in July.
The increase is expected on the back of warmer weather in August which likely boosted spending on summer clothing and food.
Pressure on consumers is also easing as wage growth surpasses inflation.
This, together with the recent interest rate cut in August, will leave more change in consumers’ pockets.

Brent crude oil is currently at $74.64/bbl; ($74.88/bbl*).
Gold is at $2594/oz ($2591/oz*).
SA CDS 174bps*, Brazil 142bps* and Turkey 253bps*.
Yields: US 10yr at 3.71%*, German bund at 2.19%*, SA 10-year generic at 10.03%*, SA’s R2030 at 8.85%*.

* Denotes yesterday’s close.

Key events and data:

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