In the loop 18 November 2024

In the loop

Shireen Darmalingam

What you should know this morning:

The rand is stronger this morning, at R18.13/$, after closing stronger on Friday (R18.18/$*).
EM currencies were mixed on Friday; the COP (+1.3%), THB (+0.8%) and MXN (+0.5%) were the biggest gainers; the RUB (-1.0%), HUF (-0.6%) and CLP (-0.4%) were the biggest losers.
Asian equity markets are mixed this morning; the Nikkei is down, while the Hang Seng and Shanghai Composite are up.

Central bank watch: the SARB will meet on Thursday and is largely expected to cut the repo rate by 25 bps, to 7.75%.
The Central Bank of Turkey (CRBT) is likely to hold the one-week repo rate at 50% for an eighth consecutive time this year, also on Thursday.
The CBRT to expected to start easing interest rates in December.
Bank Indonesia is likely to keep rates unchanged on Wednesday.
China’s banks are likely to keep their loan prime rates unchanged at the 20 November meeting.

The Eurozone CPI for October (final estimate) is due out tomorrow; headline CPI is likely to come in at 2.0% y/y in October, from 1.7% y/y in September.
The reading will provide the necessary details to better understand the drivers behind domestically generated cost pressure.
The ECB’s indicator of negotiated wage rates, due out on Wednesday, will provide an estimate of the increase in pay settlements for the region in Q3:24.
The Eurozone and UK flash PMI surveys for November are scheduled for this week.

The US NAHB housing market index for November is due for release today; sentiment likely deteriorated in November after mortgage rates climbed 72 basis points over the past six weeks.
Housing starts and building permits for October are due out on Tuesday.
Housing starts are expected to have continued falling in October.
Existing homes sales, due out on Thursday, will likely have increased by 2.5% m/m in October, after having fallen by 1.0% m/m in September.

Locally, S&P on Friday, in its six-monthly review of SA’s sovereign credit rating, changed the outlook from stable to positive.
S&P currently rates SA’s foreign currency debt as BB- (the lowest rating in the BB category, and three notches below investment grade), with a one-notch uplift to its local currency debt (at BB).
The SARB meets this week Thursday to decide on monetary policy and is largely expected to cut the repo rate by 25 bps, to 7.75%.
The SARB will have the latest CPI data for October, which will aid in the policy committee forming its decision.
CPI for October is scheduled for release on Wednesday and is expected to come in at 3.0% y/y, from 3.8% y/y in September.
On a m/m basis, CPI is expected to have increased by 0.1% in October, matching September’s increase.
Core CPI is likely to come in at 4.0% y/y in October, from 4.1% y/y in September.
Retail sales for September, also due out on Wednesday, is expected to have decreased by 2.7% y/y, following 3.2% y/y in August.
The BER’s business confidence index for Q4:24 is also on the cards on Wednesday.

Brent crude oil is currently at $71.32/bbl; ($71.04/bbl*).
Gold is at $2587/oz ($2563/oz*).
SA CDS 190bps*, Brazil 165bps* and Turkey 260bps*.
Yields: US 10yr at 4.43%*, German bund at 2.35%*, SA 10-year generic at 10.36%*, SA’s R2035 at 10.41%*.

* Denotes Friday’s close.

Key events and data:

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