In the loop
Shireen Darmalingam
What you should know this morning:
- The rand is stronger this morning, at R16.76/$, after closing weaker yesterday (R16.81/$*).
- EM currencies were mixed yesterday; the COP (+0.4%), HUF (+0.4%) and PEN (+0.4%) were the biggest gainers; the ZAR (-0.7%), INR (-0.6%) and PHP (-0.5%) were the biggest losers.
- Asian equity markets the Nikkei, Hang Seng and Shanghai Composite are up.
- The Brazilian Central Bank (BCB) has hiked the Selic rate by 50 bps, to 13.75%, as expected.
- The BCB left the door open to further rate hikes whilst attempting to anchor inflation expectations.
- Policymakers will give more emphasis to price forecasts for early 2024 as recent tax changes leave the more near-term estimates in flux.
- The BCB may, however, hike at a more cautious pace as of the next meeting.
- The committee remains vigilant, and future policy moves may be adjusted to ensure the convergence of inflation towards target.
- The BOE’s MPC rate decision is due today: a hike of 50 bps is expected despite the growing risks of a recession.
- The BOE is aiming to rein in the highest inflation in 40 years.
- The bank is facing political criticism that it had let prices spiral out of control when Covid lockdowns ended.
- The BOE is also set to start reversing its $1 trillion stimulus program.
- Governor Andrew Bailey’s press conference after the announcement will garner investor attention.
- Several countries’ services PMI data releases were out yesterday.
- The S&P Global US services PMI fell to 47.3 pts in July, from 52.7 pts in June.
- The ISM services PMI increased to 56.7 pts in July, from 56.3 pts in June.
- The S&P Global services PMI for both the UK and EU too slipped in July.
- Locally, Eskom has implemented Stage 2 loadshedding from 5am to 4pm; Stage 4 loadshedding will commence at 4pm until midnight.
- The electricity consumption and production data releases for June are due out today.
- Brent crude oil is up this morning, and up by 24.7% year-to-date.
- The gold price is up this morning, and down by 3.1% year-to-date.
- Brent crude oil is currently at $96.97/bbl; ($96.78/bbl*).
- Gold is at $1773/oz ($1759/oz*).
- SA CDS 285bps*, Brazil 283bps* and Turkey 773bps*.
- Yields: US 10yr at 2.71%*, German bund at 0.87%* and SA 10-year generic at 10.80%*, SA’s R186 at 8.99%*.
* Denotes yesterday’s close.
Key events and data:
- 10h00: Eurozone ECB publishes economic bulletin
- 13h00: UK BOE MPC decision – 50 bp hike expected
- 13h00: SA electricity consumption and production (June)
- 13h30: US trade balance (June)
- 14h30: US initial jobless claims (30 July)
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