In the loop 23 October 2024

In the loop

Shireen Darmalingam

What you should know this morning:

The rand is stronger this morning, at R17.52/$, after closing stronger yesterday (R17.53/$*).
EM currencies were mixed yesterday; the RUB (+0.8%), MXN (+0.7%) and CLP (+0.5%) were the biggest gainers; the PHP (-0.5%), MYR (-0.5%) and IDR (-0.4%) were the biggest losers.
Asian equity markets are mixed this morning; the Nikkei is down, while the Hang Seng and Shanghai Composite are up.

Central bank watch: the Bank of Canada will meet today and is expected to cut its benchmark interest rate by 50 bps, to 3.75%.
This is expected on the back of the downside surprise in September inflation as well at the Fed’s 50 bps cut in the Fed funds rate in September.

ECB President Christine Lagarde commented at the IMF gathering that she sees the direction of borrowing costs in the Eurozone as clear.
However, she noted that the pace at which the ECB may lower rates is still to be decided.
She also noted that the ECB has adopted a “sensible approach and one that should be continued with that caution element about it”.
Lagarde noted disinflation as on the right track and described the recent inflation outcomes as “relatively reassuring”.
ECB Governing Council member Francois Villeroy de Galhau believes that the bank’s 2% inflation goal may be achieved as early as the start of next year.

Eurozone consumer confidence for October is expected to have improved slightly.
The index is expected to come in at -12.5 in October, from -12.9 in September.

US existing homes sales, due out today, will likely have increased in September.
Existing home sales are expected to have increased by 0.5% m/m (to 3.88m) in September, after having declined by 2.5% m/m (to 3.86m) in August.
Declining mortgage rates in September are likely to have supported sales during the month.
The Fed’s Beige Book for September is on the cards later today.
The Beige Book is likely to show that disruptions from hurricanes are likely to have impacted economic activity in several districts.
A number of districts have already noted major disruptions in certain sectors, including transportation, energy, and agriculture.

Locally, CPI for September is in focus today and is expected at 3.8% y/y, from 4.4% y/y in August.
On a m/m basis, CPI is expected to have increased by 0.1% in September, matching August’s increase.
Core CPI is likely to come in at 4.1% y/y in September, the same as in August.

Brent crude oil is currently at $75.97/bbl; ($76.04/bbl*).
Gold is at $2752/oz ($2745/oz*).
SA CDS 186bps*, Brazil 158bps* and Turkey 274bps*.
Yields: US 10yr at 4.22%*, German bund at 2.31%*, SA 10-year generic at 10.56%*, SA’s R2035 at 10.63%*.

* Denotes yesterday’s close.

Key events and data:

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