In the loop 28 November 2023

In the loop

Shireen Darmalingam

What you should know this morning:

The rand is stronger this morning, at R18.63/$, after closing stronger yesterday (R18.70/$*).
EM currencies were mixed yesterday; the COP (+1.6%), THB (+1.1%) and PLN (+0.6%) were the biggest gainers, the ARS (-0.4%), CLP (-0.4%) and MXN (-0.2%) were the biggest losers.
Asian equity markets are mixed this morning; the Nikkei and Hang Seng are down, while the Shanghai Composite is up.

The US Conference Board consumer confidence index for November is due out today; the index will likely slip to 101, from 102.6 in October.
Such a deterioration is to be expected given the focus on jobs and income in the survey.
The University of Michigan sentiment index for November noted that around 18% of consumers are of the view that unemployment will cause serious hardship for the economy in the year ahead.
This, even more than the impact of elevated inflation.

US new home sales fell more than expected, by 5.6% m/m (to 679k annualised), in October, following a downwardly revised increase of 8.6% m/m (719k annualised) September.
The decline in new home sales was driven by high mortgage rates weighing on demand.
The median new home price fell by 17.6% y/y in October, to $409,300; the average selling price of a new home is $487,000.
Despite the decline, prices remain well above pre-pandemic levels.

Several ECB policymakers are due to make comments on the Eurozone economy and monetary policy today.
Investors will look for clues on when the central bank may commence a cutting cycle.
ECB President Christine Lagarde commented in the EU parliament yesterday that there is some evidence of softening in the region’s jobs market.
Lagarde noted that the bank’s policymakers are watching the labour data to assess the impact of monetary tightening.
She commented that economic activity in the region has stagnated in recent quarters and is expected to remain weak for the rest of the year.
Lagarde expressed confidence of the bloc's economic resurgence in the coming year.
She noted a further decline in inflation, a recovery in household incomes, and growing demand in the region as drivers of the expected resurgence.
This week’s CPI data for November is expected to have moderated further in November and will likely instil the confidence the ECB needs to hold rates steady at its December policy meeting.
The region’s M3 money supply for October is scheduled for release today.

Brent crude oil is currently at $80.09/bbl; ($79.98/bbl*).
Gold is at $2015/oz ($2010/oz*).
SA CDS 243bps*, Brazil 147bps* and Turkey 338bps*.
Yields: US 10yr at 4.40%*, German bund at 2.54%* and SA 10-year generic at 11.42%*, SA’s R2030 at 10.12%*.

* Denotes yesterday’s close.

Key events and data:

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