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In the loop 05 July 2024

In the loop

Shireen Darmalingam

What you should know this morning:

  • The rand is stronger this morning, at R18.24/$, after closing stronger yesterday (R18.25/$*).
  • EM currencies were largely up yesterday; the BRL (+1.2%), ZAR (+1.1%) and CLP (+0.6%) were the biggest gainers; the RUB (-1.3%) was the biggest loser.
  • Asian equity markets are mixed this morning; the Nikkei and Hang Seng are up, while the Shanghai Composite is down.
  • Non-farm payrolls (NFP) for June are expected to have increased by 190k, following an increase of 272k in May.
  • The leisure and hospitality industry is expected to continue creating jobs; this sector has absorbed many low-skilled immigrants.
  • The headline number may suggest that the Fed may not need to cut rates in any hurry.
  • However, the payrolls report may show that many jobs created are likely to have been part-time.
  • The unemployment rate is likely to have remained unchanged, at 4.0%, in June.
  • Election watch: Rishi Sunak conceded defeat in the British elections held yesterday.
  • Sir Keir Starmer’s Labour Party is heading for a huge House of Commons majority.
  • The French run-off elections are scheduled for Sunday; the polls are suggesting that the far-right National Rally is likely to fall short of a majority.
  • ECB President Christine Lagarde said yesterday that the bank would need further reassurance that inflation is headed back to the 2% target before it cutting interest rates further.
  • Lagarde noted that, while disinflation continues, policymakers must remain alert.
  • The ECB is keeping a close eye on services inflation, which is being driven by elevated gains in wages.
  • Locally, the SARB’s gross and net reserves for June are scheduled for release today. 
  • Gross reserves were $62.09bn in May, while net reserves were $58.29bn in May.
  • Brent crude is down this morning, and up by 13.1% year-to-date.
  • The gold price is up this morning, and up by 14.5% year-to-date.
  • Brent crude oil is currently at $87.12/bbl; ($87.43/bbl*).
  • Gold is at $2363/oz ($2357/oz*).
  • SA CDS 205bps*, Brazil 165bps* and Turkey 268bps*.
  • Yields: US 10yr at 4.35%*, German bund at 2.60%*, SA 10-year generic at 10.99%*, SA’s R2030 at 9.77%*.

* Denotes yesterday’s close.

Key events and data:

  • 08h00: SA SARB gross and net reserves (June)
  • 11h00: Eurozone retail sales (May)
  • 14h30: US non-farm payrolls (June), unemployment rate (June)
  • 21h00: US consumer credit (May)

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