In the loop

What you should know this morning:

• The rand is stronger this morning, at R16.96/$, after closing stronger yesterday (R16.98/$*).
• EM currencies were mixed yesterday; the RUB (+1.0%), ARS (+0.5%) and ZAR (+0.4%) were the biggest gainers; the COP (-0.9%), HUF (-0.7%) and CZK (-0.6%) were the biggest losers.
• Asian equity markets are mixed this morning; the Nikkei and Hang Seng are down, while the Shanghai Composite is up.

• Central bank watch: the Reserve Bank of India (RBI) today cut its benchmark interest rate for the first time in six months, by 25 bps, to 5.25%.
• The RBI noted that low inflation and strong economic growth combine to mean that India was in a “rare Goldilocks period”.

• US National Economic Council Director Kevin Hassett said that the Fed should cut interest rates at its meeting next week. 
• He signalled that he expects a 25 bps reduction. 
• He added that while he ultimately would want rates “much lower,” he would support a quarter-point move if that is where policymakers can reach consensus. 
• Hassett was asked how many additional cuts he might pursue if nominated and confirmed as Fed chair.
• Hassett stressed that the role requires being “very data responsive” and weighing how any policy adjustments would affect inflation and employment. 
• His remarks come amid growing speculation that President Trump is preparing to nominate him to lead the central bank.

• US personal income and spending for September are due out today.
• Income is likely to have increased by 0.3% m/m in September, from a 0.4% m/m increase in August.
• Spending is expected to have increased by 0.3% m/m in September, following a 0.6% m/m increase in August.
• The US University of Michigan’s consumer sentiment index, due today, is expected to have increased to 52.0 in December, from 51.0 in November.
• The 1 yr inflation expectations are to have remained unchanged at 4.5% in November.
• The 5-10 yr inflation expectations are also expected to have remained steady in November, at 3.4%.

• Locally, the SARB’s gross and net reserves for November are scheduled for release today. 
• Gross reserves were $71.55bn in October, and net reserves $69.36bn.
• Moody’s is expected to review SA today and could change the outlook on SA’s sovereign credit rating to positive, a precursor to a possible rating upgrade.

• Brent crude is down this morning, and down by 15.4% year-to-date.
• The gold price is up this morning, and up by 60.7% year-to-date.

• Brent crude oil is currently at $63.17/bbl; ($63.26/bbl*).
• Gold is at $4218/oz ($4207/oz*).
• SA CDS 139bps*, Brazil 137bps* and Turkey 227bps*.
• Yields: US 10yr at 4.09%*, German bund at 2.77%*, SA 10-year generic at 8.42%*, SA’s R2035 at 8.30%*.

* Denotes yesterday’s close.

Key events and data: 

• 08h00: SA gross and net reserves (November)
• 12h00: Eurozone GDP (Q3:25)
• 17h00: US personal income and spending (September), University of Michigan sentiment, 1 yr and 5-10 yr inflation expectations (December)
• 22h00: US consumer credit (October)

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