In the loop
27 September 2024
In the loop
Shireen Darmalingam
What you should know this morning:
- The rand is weaker this morning, at R17.23/$, after closing stronger yesterday (R17.18/$*).
- EM currencies were mixed yesterday; the CLP (+1.4%), KRW (+1.4%) and COP (+1.0%) were the biggest gainers; the RUB (-0.6%), IDR (-0.4%) and MYR (-0.4%) were the biggest losers.
- Asian equity markets the Nikkei, Hang Seng and Shanghai Composite are up.
- China’s PBOC cut the reserve requirement ratio today and also lowered a key policy rate.
- The PBOC noted that “the cut is aimed at creating a good monetary and financial environment” for steady growth of the Chinese economy.
- This comes as Beijing unveiled a strong stimulus package this week in an attempt to shore up the slowing economy and investor confidence.
- Eurozone inflation expectations for 1 year and 3 years ahead for August are scheduled for release later today.
- One-year-ahead inflation expectations is expected to come in at 2.7% in August, from 2.8% in July.
- Three-year-ahead inflation expectations are likely to have moderated to 2.3% in August, from at 2.4% in July.
- Federal Reserve Governor Lisa Cook commented yesterday that she supported the Fed’s move last week to cut interest rates by 50 bps, citing a slowing labour market and easing inflation.
- Cook added that the labour market is coming into better balance, with easing inflation reflecting a welcome return from the challenges of the pandemic.
- Cook did not comment on how much more easing might be needed in the near term.
- She noted, however, that the Fed should “look carefully at incoming economic data and the balance of risks when considering the path of policy”.
- US personal income and spending for August are in the spotlight today.
- The core PCE deflator is expected to have increased by 0.2% m/m in August, matching July’s increase.
- The University of Michigan sentiment (final estimate) index for September is also due out today; the sentiment index is likely to have been revised upwards.
- Locally, it’s a quiet day as far as data releases are concerned.
- Brent crude is down this morning, and down by 7.2% year-to-date.
- The gold price is down this morning, and up by 29.3% year-to-date.
- Brent crude oil is currently at $71.51/bbl; ($71.60/bbl*).
- Gold is at $2667/oz ($2668/oz*).
- SA CDS 178bps*, Brazil 154bps* and Turkey 269bps*.
- Yields: US 10yr at 3.79%*, German bund at 2.18%*, SA 10-year generic at 9.97%*, SA’s R2035 at 10.06%*.
* Denotes yesterday’s close.
Key events and data:
- 10h00: Eurozone 1 yr and 3 yr inflation expectations (August)
- 11h00: Eurozone consumer and economic confidence (September)
- 14h30: US personal income and spending (August)
- 16h00: US University of Michigan sentiment, 1 yr and 5-10 yr inflation expectations – September – final)
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