In the loop 11 June 2024

In the loop

Shireen Darmalingam

What you should know this morning:

The rand is unchanged this morning, at R18.75/$, after closing stronger yesterday (R18.75/$*).
EM currencies were mixed yesterday; the ZAR (+0.8%) and RUB (+0.3%) were the biggest gainers; the HUF (-0.9%), THB (-0.9%) and KRW (-0.8%) were the biggest losers.
Asian equity markets are mixed this morning; the Nikkei is up, while the Hang Seng and Shanghai Composite are down.

UK labour data will likely show that wage gains remained elevated at the start of Q2:24.
Average hourly earnings, excluding bonuses, are expected to have increased to 6.1% y/y in April, from 6.0% y/y in March.
The unemployment rate is expected to have remained steady, at 4.3%, in April.
The data, however, will unlikely deter the BOE from cutting interest rates soon.
Nonetheless, the BOE will keep a close eye on labour and wage data in the coming months.

The US NFIB small business optimism index may have slipped slightly in May.
The optimism index is likely to have eased to 89.6 in May, from 89.7 in April.
A separate NFIB survey showed that a net 15% (the highest in a year) of small business owners plan to create new jobs in the next three months.
However, fewer owners plan to raise compensation in the coming months.

The US FOMC begins its 2-day policy meeting today; the Fed is expected to keep the Fed funds rate unchanged when the meeting concludes tomorrow.
Investors will keep an eye on changes to both the inflation and GDP growth forecasts as well as the Fed's dot plot.

ECB President Christine Lagarde commented yesterday that the central bank must remain cautious.
Lagarde noted that last week’s interest rate cut won’t be the followed by further rapid rate cuts.
She added that the bank would assess new projections at every step of the way before making decisions.

Locally, manufacturing production for April is due out today; production is expected to have increased by 1.6% y/y in April, after having declined by 6.4% y/y in March.
On a m/m basis, manufacturing production is likely to have increased by 1.9% in April, following a decline of 2.2% in March.

SA election update: SA’s parliament is preparing to reconvene on Friday to elect a president.

Brent crude oil is currently at $81.54/bbl; ($81.63/bbl*).
Gold is at $2303/oz ($2313/oz*).
SA CDS 230bps*, Brazil 148bps* and Turkey 263bps*.
Yields: US 10yr at 4.46%*, German bund at 2.67%*, SA 10-year generic at 11.83%*, SA’s R2030 at 10.37%*.

* Denotes yesterday’s close.

Key events and data:

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