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In the loop 19 March 2024

In the loop

Shireen Darmalingam

What you should know this morning:

  • The rand is weaker this morning, at R18.99/$, after closing weaker yesterday (R18.97/$*).
  • EM currencies were mixed yesterday; the RUB (+0.9%) was the biggest gainer; the ZAR (-1.1%), HUF (-0.8%) and MXN (-0.7%) were the biggest losers.
  • Asian equity markets are mixed this morning, the Nikkei is up, while the Hang Seng and Shanghai Composite are down.
  • The Bank of Japan (BOJ) today raised interest rates for the first time since 2007.
  • BOJ policymakers voted 7-2 for an interest rate increase. 
  • The central bank noted that it “would guide the overnight interest rate to remain in a range of around 0% to 0.1%”.
  • The BOJ ended its yield curve control program, while pledging to keep buying long-term government bonds as needed.
  • The yen weakened in the immediate aftermath of the BOJ ending its negative interest rate.
  • The Reserve Bank of Australia (RBA) has kept its benchmark interest rate steady, at 4.35%.
  • The RBA noted that it “can't rule out the possibility that interest rates will need to be raised further”.
  • The central bank commented that inflation remains too high and that it is expected to remain at an elevated level for some time.
  • US housing starts for February are due today and are expected to have increased despite the increase in mortgage rates.
  • Housing starts are likely to have increased by 8.2% m/m in February (to 1,440k), after having declined by 14.8% m/m (1,331k) in January.
  • Projects that were delayed in January, on the back of the polar vortex resulting in a decline in permit issuance, are likely to have resumed in February amid better weather conditions.
  • Building permits are expected to have increased by 0.5% m/m (to 1,496k) in February, from a decline of 0.3% m/m (1,489k) in January.
  • The German ZEW survey for March is the first of the major surveys to be released in this region for March.
  • The survey’s expectations index is expected to have increased to 20.5 in March, from 19.9 in February.
  • The index is expected to have been supported by a solid labour market as well as expectations that interest rates have peaked.
  • The survey’s current situation index is likely to have slipped further, to -82.2 in March, from -81.7 in February.
  • The ZEW captures the opinions of finance professionals rather than real economic activity.
  • Locally, the BER’s inflation expectations survey for Q1:24 is due out today.
  • Eskom: Stage 2 loadshedding is currently in place until further notice.
  • Brent crude is down this morning, and up by 12.5% year-to-date.
  • The gold price is down this morning, and up by 4.6% year-to-date.
  • Brent crude oil is currently at $86.70/bbl; ($86.89/bbl*).
  • Gold is at $2158/oz ($2160/oz*).
  • SA CDS 226bps*, Brazil 124bps* and Turkey 317bps*.
  • Yields: US 10yr at 4.32%*, German bund at 2.45%* and SA 10-year generic at 11.86%*, SA’s R2030 at 10.47%*.

* Denotes yesterday’s close.

Key events and data:

  • 10h00: SA BER inflation expectations (Q1:24)
  • 12h00: Germany ZEW survey expectations (March)
  • 14h30: US building permits (February), housing starts (February)

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