In the loop 18 October 2024

In the loop

Christelle Grobler

What you should know this morning:

The rand is stronger this morning, at R17.62/$, after closing weaker yesterday (R17.69/$*).
EM currencies were mixed yesterday; the CLP (-1.1%), PLN (-0.8%) and KRW (-0.6%) lost the most; the PEN (+0.3%), COP (+0.2%) and BRL (+0.2%) gained the most.
Asian equity markets, the Nikkei, Hang Seng and Shanghai Composite are up this morning.

Japan’s CPI inflation slowed to 2.5% y/y in September, from 3.0% in August – the first deceleration in inflation since April.
Government utility subsidies are a main driver of lower inflation, according to the Ministry of Internal Affairs; lower electricity and gas prices subtracted 0.55 ppts from overall inflation.
Core inflation measures, which exclude volatile items from the consumer basket, were mixed in September.
CPI, excluding food and energy items, rose to 2.1% y/y in September, from 2.0% y/y in August, while CPI, excluding only food, slowed to 2.4% y/y in September, from 2.8% y/y in August.
The BOJ will meet later this month; the CPI reading supports expectations that the bank will keep interest rates unchanged.

China released a slew of economic data, including Q3:24 GDP, earlier today.
Real GDP growth came in at 4.6% y/y in Q3:24, the slowest pace since March 2023, and down from 4.7% y/y in Q2:24.
This puts the year-to-date figure at a weaker-than-expected growth rate of 4.8% y/y.
In q/q terms, growth was 0.9% in Q3:24, following a downwardly revised increase of 0.5% q/q (0.7% previously) in Q2:24.
Other key indicators for September showed a broad improvement in China’s economy late in Q3:24.
Industrial production growth picked up more than expected, reaching 5.4% y/y in September, from 4.5% y/y in August.
Retail sales growth also surprised on the upside, with growth accelerating to 3.2% y/y in September, from 2.1% y/y in August.
The surveyed jobless rate declined to 5.1% in September, from 5.3% in August.

Key US housing market data for September is due for release today.
Housing starts likely slowed slightly, to 1,350k in September, from 1,356k in August.
Building permits also likely cooled to 1,460k in September, from a downwardly revised 1,470k in August.
New house construction indicators have been on a downward trajectory since mid-2022.
While lower interest rates should assist new house construction over time, relatively high inventory will likely keep housing starts subdued in the near term.

Brent crude oil is currently at $74.74/bbl; ($74.45/bbl*).
Gold is at $2711/oz ($2692/oz*).
SA CDS 181bps*, Brazil 154bps* and Turkey 266bps*.
Yields: US 10yr at 4.09%*, German bund at 2.21%*, SA 10-year generic at 10.55%*, SA’s R2035 at 10.61%*.

* Denotes yesterday’s close.

Key events and data:

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