In the loop 13 May 2024

In the loop

Shireen Darmalingam

What you should know this morning:

The rand is stronger this morning, at R18.40/$, after closing stronger on Friday (R18.44/$*).
EM currencies were mixed on Friday; the THB (+0.6%), MXN (+0.6%) and ZAR (+0.4%) were the biggest gainers; the PEN (-0.7%), PLN (-0.4%) and BRL (-0.3%) were the biggest losers.
Asian equity markets are mixed this morning; the Nikkei and Shanghai Composite are down, while the Hang Seng is up.

The People’s Bank of China is likely to keep its policy rate unchanged on Wednesday.
China’s activity data, due out on Friday, will likely show a production-led rebound restrained by sluggish consumption.
Japan’s GDP for Q1:24 is scheduled for release on Thursday and is expected to have contracted by 1.2% q/q, after having increased by 0.4% q/q in Q4:23.
This contraction is expected on the back of a temporary setback in the auto sector.

UK labour data, due out tomorrow, will likely show that wage gains remained elevated in Q1:24.
The unemployment rate is expected to have increased to 4.3% in March, from 4.2% in February.
Eurozone industrial production for March, out on Wednesday, is likely to have increased by 0.8% m/m, matching February’s increase.
The Eurozone Q1:24 GDP is scheduled for release on Wednesday and is likely to come in at 0.3% q/q, matching the increase in Q4:23.
The Eurozone CPI for April (final estimate), scheduled for release on Friday, will provide the data needed to better understand what drove sticky services price inflation lower during the month.
Headline CPI is expected to come in at 2.4% y/y in April, from 2.4% y/y in March.

The US April CPI is in the spotlight this week on Wednesday; both headline and core inflation are likely to have moderated in April.
Headline CPI is likely to come in at 3.4% y/y in April, from 3.5% y/y in March; core CPI is expected at 3.6% y/y in April, from 3.8% y/y in March.
PPI for April, due out tomorrow, likely increased to 2.2% y/y in April, from 2.1% y/y in March.
The US NFIB small business optimism for April, due out tomorrow, is likely to reflect a continued deterioration; the index likely slipped to 88.2 in April, from 88.5 in March.
April’s retail sales are due out on Wednesday; sales likely slowed entering Q2:24 from March’s elevated pace.
Business inventories for March, also scheduled for release on Wednesday, likely stagnated in March, following an increase of 0.4% m/m in February.
The NAHB housing market index for May is due for release on Wednesday; sentiment among home builders likely remained flat in May.
Housing starts and building permits for April are due out on Thursday.
The April data will likely show a partial retracing of housing starts and permits following the steep declines in March.

Locally, mining production for March, due tomorrow, likely increased by 2.9% y/y, after having increased by 9.9% y/y in February.
Mining production is likely to have declined by 0.6% m/m in March, after having increased by 5.0% y/y in February.
The Quarterly Labour Force Survey (QLFS) for Q1:24 is also due out tomorrow; the unemployment rate is expected to have increased to 32.3% in Q1:24, from 32.1% in Q4:23.
Retail sales for March, due out on Wednesday, is expected to have declined by 1.0% y/y, following the 0.8% y/y decline in February.
On a m/m basis, sales are likely to have increased by 0.2% in March, after increasing by 0.4% in February.

Brent crude oil is currently at $82.50/bbl; ($82.79/bbl*).
Gold is at $2351/oz ($2360/oz*).
SA CDS 227bps*, Brazil 140bps* and Turkey 283bps*.
Yields: US 10yr at 4.49%*, German bund at 2.51%*, SA 10-year generic at 11.92%*, SA’s R2030 at 10.50%*.

* Denotes Friday’s close.

Key events and data:

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