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In the loop 13 November 2023

In the loop

Shireen Darmalingam

What you should know this morning:

  • The rand is weaker this morning, at R18.75/$, after closing weaker on Friday (R18.72/$*).
  • EM currencies were mixed on Friday; the MXN (-0.9%), THB (-0.9%) and ZAR (-0.8%) were the biggest losers, the BRL (+0.6%) the biggest gainer.
  • Asian equity markets are mixed this morning; the Nikkei is up, while the Hang Seng and Shanghai Composite are down. 
  • In Asia, the People’s Bank of China (PBOC) will meet this week and is expected to keep the 1 yr medium-term lending facility rate unchanged. 
  • Retail sales for October, also scheduled for release on Wednesday, is likely to have increased – due to low base effects rather than stronger consumption. 
  • Japan’s Q3:13 GDP, due out on Wednesday, likely contracted.
  • India’s CPI for October, due out today, is expected to have moderated given a raft of government measures restraining price gains for food and fuel.
  • The Philippines Central Bank will meet on Thursday and is expected to keep rates on hold after October’s off-meeting hike. 
  • In the US, CPI data for October will be released tomorrow and is expected to have moderated to 3.3% y/y, from 3.7% y/y in September. 
  • Core CPI is expected to have remained unchanged in October, at 4.1% y/y.
  • The NFIB small business optimism, also due out tomorrow, is likely to have remained depressed in October after dipping in September.
  • Retail sales for October, due out on Wednesday, is expected to have slowed, driven by a decline in new vehicle and gasoline sales.
  • PPI for October, also out on Wednesday, likely slowed due to lower energy prices.
  • The Empire manufacturing index for November is likely to have improved to -3.0, from -4.6 in October; optimism among survey respondents has been waning, particularly for new orders and shipments.
  • The NAHB housing market index is due out on Thursday; sentiment could improve slightly in November.
  • Higher mortgage rates throughout October likely slowed the pace of building permit issuance and housing starts; the data is due out on Friday.
  • In the UK, CPI for October is the key focus this week; it likely moderated to below 5% for the first time in two years. 
  • Such an outcome would ease the pressure on the BOE to hike rates further. 
  • UK jobs data, due out on Tuesday, will likely offer further evidence of labour demand cooling and wage pressures softening. 
  • In the Eurozone, the second estimate of CPI for October, due out on Friday, will likely confirm that underlying price pressures are subsiding. 
  • This should support the case for the ECB to keep rates unchanged at its next policy meeting.
  • Locally, Stats SA’s Quarterly Labour Force Survey (QLFS) is scheduled for release tomorrow; the unemployment rate is likely to have slipped to 32.5% in Q3:23, from 32.6% in Q2:23.
  • Retail sales for September, due out on Wednesday, is expected to have declined by 0.4% y/y in September, after having fallen by 0.5% y/y in August.
  • On a m/m basis, sales are likely to have increased by 0.1% in September, following a 0.2% in August.
  • Eskom: Stage 2 loadshedding is currently in place until 4pm, Stage 3 loadshedding will be implemented then until 5am tomorrow.
  • Electricity Minister Kgosientsho Ramakgopa commented yesterday that SA is accelerating the deployment of up to 3 GW of gas-fired power generation capacity. 
  • The 3 GW of planned gas-powered capacity will help plug the energy deficit.
  • The project is currently at procurement stage and includes a 2 GW mobile facility as well as a 1 GW gas-to-power plant located near Coega in the Eastern Cape.
  • Brent crude oil is down this morning, and down by 6.1% year-to-date.
  • The gold price is down this morning, and up by 6.2% year-to-date.
  • Brent crude oil is currently at $80.67/bbl; ($81.43/bbl*).
  • Gold is at $1937/oz ($1940/oz*).
  • SA CDS 265bps*, Brazil 166bps* and Turkey 379bps*.
  • Yields: US 10yr at 4.65%*, German bund at 2.71%* and SA 10-year generic at 11.66%*, SA’s R2030 at 10.39%*.

* Denotes Friday’s close. 

Key events and data: 

  • 08h00: Japan machine tool orders (October)

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