In the loop
Shireen Darmalingam
What you should know this morning:
- The rand is weaker this morning, at R17.68/$, after closing stronger yesterday (R17.67/$*).
- EM currencies were mixed yesterday; the THB (+0.3%), PLN (+0.1%) and ZAR (+0.1%) were the biggest gainers; the COP (-1.2%), BRL (-0.9%) and CLP (-0.8%) were the biggest losers.
- Asian equity markets are mixed this morning; the Nikkei is up, while the Hang Seng and Shanghai Composite are down.
- UK Chancellor Rachel Reeves is due to deliver the UK Budget later today.
- There is likely to be an overhaul of the UK’s fiscal rules to make room for borrow to invest.
- Reeves is expected to raise taxes.
- The Eurozone GDP for Q3:24 is due out today; GDP is expected to come in at 0.2% q/q in Q3:24, matching the increase in Q2:24.
- Survey data has been flagging risks to the downside.
- Several countries’ GDP growth data releases for Q3:24 are also due out today.
- Investors will likely keep an eye on GDP data out of Germany, Italy and Spain.
- Germany is likely to remain the weakest link amongst the Eurozone economies.
- The US Q3:24 GDP is in the spotlight today; GDP growth is expected at 2.9% q/q in Q3:24, from 3.0% q/q in Q2:24.
- Consumer spending is once again expected to have supported growth in Q3:24; business investment could surprise to the upside in Q3:24.
- Business investment in equipment likely contributed positively to growth in Q3:24.
- The US private sector ADP employment report for October is due out today.
- Private payrolls are likely to have increased by 111k in October, after an increase of 143k in September.
- Investors are also keeping an eye on the non-farm payrolls (NFP) for October, due out on Friday, which likely increased, by 110k, following an increase of 154k in September.
- Locally, the SA Medium-Term Budget Policy Statement (MTBPS) to be tabled in parliament will be in the spotlight today.
- We expect the MTBPS to reflect continuity from this year’s Budget (in February), particularly in terms of the stated strategy to pursue primary budget surpluses to stabilise the government debt-GDP ratio.
- We expect modest fiscal slippage in the current fiscal year, with revenues likely falling short of Treasury’s latest forecasts.
- With a fairly steady fiscal prognosis, we expect the emphasis in the MTBPS to be on SA’s fundamental macroeconomic policy direction, in particular the policy reforms driven by Operation Vulindlela.
- It will also likely focus on interventions to accelerate infrastructure investment, and possibly some guidance on a future fiscal anchor.
- Brent crude is up this morning, and down by 7.2% year-to-date.
- The gold price is up this morning, and up by 34.8% year-to-date.
- Brent crude oil is currently at $71.48/bbl; ($71.12/bbl*).
- Gold is at $2781/oz ($2769/oz*).
- SA CDS 189bps*, Brazil 154bps* and Turkey 270bps*.
- Yields: US 10yr at 4.25%*, German bund at 2.33%*, SA 10-year generic at 10.35%*, SA’s R2035 at 10.40%*.
* Denotes yesterday’s close.
Key events and data:
- 12h00: Eurozone consumer and economic confidence (October), GDP (Q2:24)
- 13h00: US MBA mortgage applications (25 October)
- 14h00: SA Medium-Term Budget Policy Statement
- 14h00: SA month budget balance (September)
- 14h15: US ADP employment change
- 14h30: UK Budget
- 14h30: US GDP (Q3:24)
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