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In the loop 13 January 2022

In the loop

Shireen Darmalingam

What you should know this morning:

  • The rand is weaker this morning, at R15.31/$, after closing stronger yesterday (R15.30/$*).
  • EM currencies were mixed yesterday; the TRY (+4.5%), ZAR (+1.7%) and HUF (+1.4%) were amongst the biggest gainers; the RUB (-0.3%), IDR (-0.1%) and ARS (-0.1%) were amongst the biggest losers.
  • Asian equity markets are mixed this morning; the Nikkei and Shanghai Composite are down, while the Hang Seng is up.
  • Switzerland, Spain and the UK have suggested that the pandemic may be shifting to an endemic phase.
  • Infection rates are falling in London, raising hopes that the Omicron variant outbreak is easing. 
  • Tokyo is expected to raise its alert level to the second-highest level as daily infections surge.
  •  
  • The Fed’s Beige Book noted that the US economy grew at a modest pace in the final weeks of 2021 despite ongoing supply chain issues and a shortage of workers.
  • Demand remained strong and consumer spending grew even as Covid infections surged.
  • Employers indicated that they struggled to fill open positions.
  • The report showed businesses were able to pass along price gains to customers in December.
  • It also noted that businesses in several districts reported expectations for growth over the next several months had eased somewhat in the final weeks of 2021.
  • Several Fed policymakers commented on US monetary policy yesterday.
  • St Louis Fed President James Bullard foresees four rate increases this year.
  • He noted that it’s important for the Fed to start hiking rates to avoid having to be more aggressive later.
  • San Francisco Fed President Mary Daly also sees rates lift-off in March.
  • Fed Governor Lael Brainard noted that tackling inflation and getting it back down to 2% is the Fed’s most important task.
  • SA has the 18th highest caseload, at 3.54 million; 6,762 new cases were reported yesterday.
  • Active cases are at 138,326; KwaZulu-Natal is ahead with 60,806 active cases, followed by the Western Cape with 23,433.
  • Covid-19 deaths rose by 181 yesterday, to 92,830; 3.309 million people (or 93.5%) have recovered from the virus.
  • 21.654 million tests have been conducted since 5 March 2020; 43,494 tests were conducted yesterday; the positivity rate is at 15.5%.
  • 28.585 million vaccines have been administered in SA to date; 72,871 vaccines were administered yesterday.
  • 15.929 million people, or 40% of the adult SA population, have been fully vaccinated.
  • Brent crude oil is down this morning, and up by 8.5% year-to-date.
  • The gold price is up this morning, and down by 0.2% year-to-date.
  • Brent crude oil is at $84.38/bbl; ($84.67/bbl*).
  • Gold is at $1827/oz ($1826/oz*).
  • SA CDS 195bps*, Brazil 208bps* and Turkey 557bps*.
  • Yields: US 10yr at 1.74%*, German bund at -0.059%* and SA 10-year generic at 9.81%*, SA’s R186 at 7.75%*.

* Denotes yesterday’s close.

Key events and data: 

  • 08h00: Japan machine tool orders (December)
  • 13h00: SA electricity production and consumption (November)
  • 15h30: US PPI (December), initial jobless claims (8 January)

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