In the loop 23 April 2024

In the loop

Shireen Darmalingam

What you should know this morning:

The rand is weaker this morning, at R19.19/$, after closing weaker yesterday (R19.17/$*).
EM currencies were mixed yesterday; the BRL (+0.7%), KRW (+0.2%) and CLP (+0.2%) were the biggest gainers; the RUB (-0.6%), PEN (-0.4%) and THB (-0.4%) were the biggest losers.
Asian equity markets are mixed this morning; the Nikkei and Hang Seng are up, while the Shanghai Composite is down.

BOJ Governor Kazuo Ueda commented today that the central bank would raise interest rates further if inflation increases as the bank expects.
The BOJ expects to have achieved its inflation goal towards the year ending in March 2026.
Governor Ueda also added that the BOJ would provide liquidity if geopolitical risks caused disruptions in financial markets.
The BOJ will meet on Friday and is expected to keep rates unchanged at that meeting.

ECB Governing Council member Mario Centeno commented yesterday that the ECB might cut interest rates by more than 100 bps this year.
He added that inflation might moderate towards the bank’s 2% target faster than expected in March.
Centeno also said that inflation could fall below 2%, even if only temporarily.
Centeno stressed that the central bank should not be lowering interest rates only when inflation reaches the target.
He said that an interest rate target at the end of the monetary policy process of 2% would be a good benchmark for the rate cutting cycle.

Several countries’ PMI data releases for April are scheduled for release today.
The Eurozone composite PMI for April is expected to provide an indication of whether the economy continued to strengthen into Q2:24.
The composite PMI is likely to have increased to 50.7 in April, from 50.3 in March.
Both the manufacturing and services PMIs are expected to have improved in April.
Activity is expected to improve over the course of 2024; however, momentum is likely to be gradual as the economy continues to feel the impact of the series of interest rate increases.

The UK composite PMI for April, also due out today, is expected to come in at 52.6 in April, from 52.8 in March.
The manufacturing PMI is likely to have increased marginally in April, while the services PMI is expected to have slipped slightly in April.

The US composite PMI is expected to 52.0 in April, from 52.1 in March.
Both the manufacturing and services are expected to have increased in April, albeit only slightly.
US new homes sales for March are due out today; a recovery is expected in March following February’s surprise decline.
It’s likely that prospective buyers have started considering new homes, as inventory of existing homes remains historically low.

Locally, the SARB’s leading indicator for February is scheduled for release today; the index increased to 110.8 in January.
Eskom: loadshedding remains suspended until further notice.

Brent crude oil is currently at $87.52/bbl; ($87.00/bbl*).
Gold is at $2307/oz ($2329/oz*).
SA CDS 250bps*, Brazil 158bps* and Turkey 310bps*.
Yields: US 10yr at 4.60%*, German bund at 2.48%*, SA 10-year generic at 12.14%*, SA’s R2030 at 10.74%*.

* Denotes yesterday’s close.

Key events and data:

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