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 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:

Read PDF