In the loop
Shireen Darmalingam
What you should know this morning:
- The rand is stronger this morning, at R17.78/$, after closing weaker yesterday (R17.80/$*).
- EM currencies were largely down yesterday; the ZAR (-1.5%), COP (-1.2%) and HUF (-1.0%) were the biggest losers; the CLP was up by 0.1%.
- Asian equity markets are mixed this morning; the Nikkei is up, while the Hang Seng and Shanghai Composite are down.
- Several ECB policymakers commented on the Eurozone economy and monetary policy yesterday.
- ECB Governing Council member Jose Luis Escriva said that upside and downside risks to the ECB 2% inflation target are about equal.
- Escriva added that the ECB would analyse all incoming data in the lead up to policy meetings; policy decisions will remain data-dependent.
- ECB President Christine Lagarde last week noted downside risks to inflation as slightly outweighing upside risks.
- Several policymakers have this week warned of inflation possibly undershooting the ECB’s 2% target.
- The US, UK and Eurozone flash PMI data for October will be released today.
- These indices will provide an indication of whether economic activity continued to strengthen into the final quarter of the year.
- The UK composite PMI is expected to have slipped, albeit only marginally, to 52.5 in October, from 52.6 in September.
- Both the manufacturing and services PMIs are expected to have remained steady in October.
- The Eurozone composite PMI is expected to have improved in October but remaining in contraction.
- The composite index is expected to have increased to 49.7 in October, from 49.6 in September; the manufacturing and services PMIS are also likely to have increased in October.
- The US composite PMI is likely to have slipped further in October; the manufacturing PMI is likely to have improved, while the services PMI is expected to have slipped.
- The US Fed’s Beige Book for September showed little growth across most of the districts in September.
- Most districts reported “slight or modest” growth in employment; several districts said that prices rose at a “slight or modest pace”.
- The report highlighted consumer spending as mixed in September, and noted “shifts in the composition of purchases, mostly toward less expensive alternatives”.
- Locally, it’s a quiet day.
- Brent crude is up this morning, and down by 1.5% year-to-date.
- The gold price is up this morning, and up by 32.2% year-to-date.
- Brent crude oil is currently at $75.85/bbl; ($74.96/bbl*).
- Gold is at $2728/oz ($2719/oz*).
- SA CDS 189bps*, Brazil 159bps* and Turkey 276bps*.
- Yields: US 10yr at 4.24%*, German bund at 2.30%*, SA 10-year generic at 10.69%*, SA’s R2035 at 10.75%*.
* Denotes yesterday’s close.
Key events and data:
- 08h00: Japan machine tool order (September – final)
- 10h00: Eurozone HCOB manufacturing, services and composite PMI (October)
- 10h30: UK S&P Global manufacturing, services and composite PMI (October)
- 14h30: US initial jobless claims (19 October)
- 15h45: US S&P Global manufacturing, services and composite PMI (October)
- 16h00: US new home sales (September)
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