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In the loop 05 February 2024

In the loop

Shireen Darmalingam

What you should know this morning:

  • The rand is weaker this morning, at R18.91/$, after closing weaker on Friday (R18.89/$*).
  • EM currencies were mixed on Friday; the KRW (+0.7%), IDR (+0.7%) and THB (+0.6%) were the biggest gainers; the CLP (-1.6%), ZAR (-1.6%) and COP (-1.2%) were the biggest losers.
  • Asian equity markets are mixed this morning; the Nikkei is up, while the Hang Seng and Shanghai Composite are down.
  • Chinese CPI and PPI data releases for January are due out this week and may show the deflation trend as continuing into 2024.
  • The Reserve Bank of Australia (RBA) will likely keep rates unchanged tomorrow.
  • The bank is likely to convey a less hawkish tone at this meeting, following the significant moderation in inflation. 
  • The Reserve Bank of India (RBI) is also expected to keep its benchmark interest rate steady, on Thursday.
  • Thailand’s central bank is largely expected to keep policy steady on Thursday, against government pressure to cut rates.
  • GDP data releases for Q4:23 for New Zealand and Indonesia are due out this week. 
  • The National Bank of Poland is expected to hold rates steady, at 5.75%, for a 4th consecutive meeting, on Wednesday.
  • The Swedish Riksbank will release the meeting minutes of its most recent policy meeting on Wednesday.
  • The minutes will be closely watched for signs as to when the bank will embark on cutting rates.
  • German industrial production data for December is due on Wednesday and will offer more insight into the state of Germany’s industry.
  • Industrial weakness is likely a driver of the Q4:23 GDP weakness.
  • The OECD will publish its Interim Economic Outlook today.
  • The US ISM services index for January, due out today, is likely to have increased to 52.0, up from December’s reading.
  • The December trade balance is on the cards on Wednesday; the deficit is likely to have compressed.
  • Initial jobless claims for the week ending 3 February are due out on Thursday and are expected to have climbed further. 
  • Investors will keep an eye on revisions to the US CPI data, scheduled for release on Friday; the data may affect when the Fed will begin its cutting cycle.
  • Locally, the industry-wide PMI for January is due out today; the index was below the 50pt benchmark, at 49.0 in December. 
  • Gross reserves are scheduled for release on Wednesday and are expected to have slipped to $62.40bn in January, from $62.52bn in December.
  • Net reserves likely also slipped, to $56.70bn in January, from $56.90bn in December.
  • Manufacturing production for December, due out on Thursday, is expected at 2.7% y/y, following a 1.9% y/y increase in November.
  • Eskom: Stage 2 loadshedding is currently in place until 4pm; Stage 3 loadshedding will be implemented then. 
  • Brent crude is up this morning, and up by 1.0% year-to-date.
  • The gold price is down this morning, and down by 1.5% year-to-date.
  • Brent crude oil is currently at $77.85/bbl; ($77.33/bbl*).
  • Gold is at $2031/oz ($2039/oz*).
  • SA CDS 229bps*, Brazil 135bps* and Turkey 329bps*.
  • Yields: US 10yr at 4.01%*, German bund at 2.24%* and SA 10-year generic at 11.12%*, SA’s R2030 at 9.76%*.

* Denotes Friday’s close.

Key events and data:

  • 11h00: Eurozone HCOB services and composite PMI (January – final)
  • 11h00: SA industry-wide PMI (January)
  • 11h30: Eurozone Sentix Investor Confidence (February)
  • 11h30: UK S&P Global services and composite PMI (January – final)
  • 12h00: Eurozone PMI (December), OECD publishes Interim Economic Outlook
  • 16h45: US S&P Global services and composite PMI (January – final)
  • 17h00: US ISM services index (January)

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