In the loop
Shireen Darmalingam
What you should know this morning:
- The rand is weaker this morning, at R19.01/$, after closing weaker yesterday (R18.98/$*).
- EM currencies were largely down yesterday; the BRL (-1.3%), CLP (-1.0%) and COP (-1.0%) were the biggest losers.
- Asian equity markets the Nikkei, Hang Seng and Shanghai Composite are down.
- China’s GDP overshot expectations in Q1:24, at 5.3% y/y, from 5.2% y/y in Q4:23.
- On a q/q (seasonally adjusted basis), GDP was up by 1.6% in Q1:24, from 1.0% in Q4:23.
- The increase comes after the rolling out of supportive fiscal and monetary policy measures.
- However, growth in industrial production and retail sales was slower than expected.
- New York Fed President John Williams noted yesterday that he still expects the Fed to start cutting interest rates this year.
- This, however, is premised on inflation continuing to come down gradually.
- He noted that there is no need to cut rates in the very near term.
- Williams highlighted that the US economy is performing well, noting the strength of consumers and the broader economy.
- He added that policymakers are keeping a close eye on developments in the Middle East, adding though that he does not see this as a major driver of the US outlook.
- San Francisco Fed President Mary Daly concurred that there is no rush to cut rates.
- The US NAHB housing market index remained unchanged in April, at 51, albeit still the highest since July last year.
- Home-builder sentiment stalled in April as potential buyers wait for interest rates to start coming down.
- Sentiment, however, is below the high reached in 2020; at that time, interest rates were less than half the current level.
- Housing starts and building permits for March are due out tomorrow; both are likely to have slowed.
- Housing starts are likely to have declined by 2.6% m/m in March (to 1,482k), after having increased by 10.7% m/m (1,521k) in February.
- Projects were delayed in January and February by adverse weather conditions; the March data should however still show a slower pace of housing starts despite better weather conditions.
- Building permits are also expected to have declined in March, by 0.9% m/m (to 1,510k), from an increase of 2.4% (1,524k) in February.
- The US industrial production and manufacturing data for March will be released today.
- Survey data has shown new orders as increasing and boosting business activity into positive territory in March.
- Industrial production is expected to have increased by 0.4% m/m in March, from a 0.1% m/m increase in February.
- Manufacturing production is likely to be up by 0.2% m/m in March, following an increase of 0.8% m/m in February.
- The UK jobs and wage data will likely provide further evidence that this labour market has been cooling; the data will be closely watched by the BOE.
- The UK ILO unemployment rate for February is expected to a have increased to 4.0%, from 3.9% in January.
- Average weekly earnings (excluding bonuses) for the three months to February are likely to have moderated to 5.8% y/y, from an increase of 6.1% y/y in the three months to January.
- Eskom: loadshedding remains suspended until further notice.
- Brent crude is up this morning, and up by 17.7% year-to-date.
- The gold price is up this morning, and up by 15.7% year-to-date.
- Brent crude oil is currently at $90.67/bbl; ($90.10/bbl*).
- Gold is at $2388/oz ($2357/oz*).
- SA CDS 254bps*, Brazil 155bps* and Turkey 309bps*.
- Yields: US 10yr at 4.60%*, German bund at 2.44%*, SA 10-year generic at 12.20%*, SA’s R2030 at 10.77%*.
* Denotes yesterday’s close.
Key events and data:
- 08h00: UK ILO unemployment rate (February), average weekly earnings (February)
- 11h00: Eurozone ZEW survey expectations (April), trade balance (February)
- 14h30: US housing starts, building permits March)
- 15h15: US industrial production, capacity utilisation (March), manufacturing production (March)
Read PDF