In the loop
Shireen Darmalingam
What you should know this morning:
- The rand is weaker this morning, at R18.40/$, after closing stronger yesterday (R18.32/$*).
- EM currencies were mixed yesterday; the RUB (+2.0%), KRW (+0.5%) and ZAR (+0.3%) were the biggest gainers; the MXN (-1.2%), BRL (-1.2%) and COP (-0.8%) were the biggest losers.
- Asian equity markets the Nikkei, Hang Seng and Shanghai Composite are down.
- The US S&P Global composite PMI overshot expectations in July, increasing to 55.0, from 54.8 in June.
- This increase was driven by an improvement in the services PMI, which increased to 56.0 in July, from 55.3 in June.
- The manufacturing PMI gauge disappointed by falling into contraction in June; the manufacturing PMI slipped to 49.5, from 51.6 in June.
- This deterioration was driven by a sharp fall in the new orders sub-index, signalling weakness in demand for manufactured goods.
- The employment sub-index was muted in July, implying fewer companies overall as hiring.
- The US goods trade deficit compressed in June for the first time this year due to a broad rebound in exports.
- The goods trade deficit narrowed to $96.8bn in June, from a revised $99.4bn in May.
- Goods exports increased by 2.5% m/m in June, to $172.3bn, from $168.0bn in May; this increase was led by a 4.9% surge in the shipments of food.
- Imports were up by 0.7% m/m in June, to $269.2bn, from $267.4bn in May.
- Despite the narrower deficit in June, trade remains a drag on economic growth.
- The US Q2:24 GDP is in the spotlight today; GDP growth is expected at 2.0% q/q in Q2:24, from 1.4% q/q in Q1:24.
- Consumer spending is once again expected to have supported growth in Q2:24 despite elevated interest rates and inflation.
- High income earners continued to exhibit increased appetite for travel and entertainment.
- Business investment could surprise to the upside in Q2:24.
- Residential investment, however, is expected to have contracted in Q2:24.
- Locally, PPI for June is scheduled for release today and is expected to come in at 4.5% y/y, from 4.6% y/y in May.
- On a m/m basis, PPI is expected to have declined by 0.2% in June, after having increased by 0.1% in May.
- Brent crude is down this morning, and up by 5.2% year-to-date.
- The gold price is down this morning, and up by 15.0% year-to-date.
- Brent crude oil is currently at $81.09/bbl; ($81.71/bbl*).
- Gold is at $2370/oz ($2419/oz*).
- SA CDS 200bps*, Brazil 159bps* and Turkey 261bps*.
- Yields: US 10yr at 4.28%*, German bund at 2.44%*, SA 10-year generic at 10.79%*, SA’s R2030 at 9.46%*.
* Denotes yesterday’s close.
Key events and data:
- 10h00: Eurozone M3 money supply (June)
- 11h30: SA PPI (June)
- 14h30: US GDP (Q2:24), initial jobless claims (20 July), durable goods orders (June)
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