In the loop

What you should know this morning:

• The rand is stronger this morning, at R16.61/$, after closing weaker yesterday (R16.65/$*).
• EM currencies were mixed yesterday; the BRL (+1.4%), CZK (+1.1%) and CLP (+1.0%) were the biggest gainers; the RUB (-1.8%), INR (-0.4%) and ARS (-0.2%) were the biggest losers.
• Asian equity markets the Nikkei, Hang Seng and Shanghai Composite are up.   

• The Reserve Bank of India (RBI) has hiked the repo rate by 50 bps, to 5.4%.
• The bank has hiked rates by a cumulative 140 bps in this tightening cycle.
• Governor Shaktikanta Das has cited India’s economy as being obviously impacted by the global economy, as well as by rising inflation.
• Das expects inflation to remain above the bank’s ideal target.

• Cleveland Fed President Loretta Mester has said that the US economy is not currently in recession, but the risks of a recession have risen. 
• She reiterated the bank’s commitment to continue with aggressive tightening until inflation starts to moderate.
• Several other policymakers this week concurred with that statement.
• However, expectations are that the Fed may opt for a less aggressive phase of monetary policy tightening. 
• Indeed, some policymakers have pointed to strong jobs growth data as “better evidence” of the health of the US economy. 
• The focus is on the US labour data today; non-farm payrolls are expected to have increased by 250k July, following a 372k increase in June.
• The unemployment rate is expected to have remained unchanged, at 3.6% in June.
• Average hourly earnings are expected to have increased by 4.9% y/y (0.3% m/m) in July, from an increase of 5.1% y/y (0.3% m/m) in June.

• Locally, the SARB’s gross and net reserves for July are on the cards today.
• Eskom has implemented Stage 2 loadshedding from 5am today until midnight.

• Brent crude oil is up this morning, and up by 21.4% year-to-date.
• The gold price is up marginally this morning, and down by 2.1% year-to-date.

• Brent crude oil is currently at $94.42/bbl; ($94.12/bbl*).
• Gold is at $1791/oz ($1790/oz*).
• SA CDS 269bps*, Brazil 273bps* and Turkey 729bps*.
• Yields: US 10yr at 2.68%*, German bund at 0.80%* and SA 10-year generic at 10.67%*, SA’s R186 at 8.82%*.

* Denotes yesterday’s close.

Key events and data: 

• 08h00: SA gross and net reserves (July)
• 14h30: US non-farm payrolls, unemployment rate (July)
• 21h00: US consumer credit (June)

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