In the loop 10 December 2024

In the loop

Shireen Darmalingam

What you should know this morning:

The rand is weaker this morning, at R17.81/$, after closing stronger yesterday (R17.73/$*).
EM currencies were mixed yesterday; the ZAR (+1.6%), COP (+0.8%) and THB (+0.8%) were the biggest gainers; the KRW (-0.5%), PHP (-0.5%) and ARS (-0.3%) were the biggest losers.
Asian equity markets the Nikkei, Hang Seng and Shanghai Composite are up.

Central bank watch: the Reserve Bank of Australia (RBA) held the cash rate steady, at 4.35%, today.
The RBA noted that it will “continue to rely upon the data and the evolving assessment of risks to guide its decisions”.
The central bank added that it is gaining confidence that inflation is moving sustainably towards its target.
The RBA is largely expected to start cutting rates early in 2025.

China’s leaders yesterday signalled bolder economic stimulus in 2025 as it prepares for another trade war when President-elect Donald Trump takes office in January.
President Xi Jinping’s Politburo signalled its intention to embrace “moderately loose” monetary policy in 2025.
This implies further rate cuts and that the central bank may shift from its “prudent” strategy that’s been in place for over a decade.
The Politburo also pledged “more proactive” fiscal policy.
This has raised expectations for Beijing to widen the fiscal deficit from 3% at its annual parliamentary session in March 2025.

BOE Deputy Governor Dave Ramsden commented yesterday that the BOE has no room for complacency on stability.
He noted that the central bank “must continue to be vigilant in light of increasing uncertainty around the outlook, by effectively monitoring and assessing risks present in UK financial markets”.
He added that if the bank can achieve the balance in the BOE’s balance sheet operations, this should assist in maintaining financial stability.

New York Fed 1-year US inflation expectations increased to 2.97% in November, from 2.87% in October.
Consumers expect gasoline prices to rise by 2.7% over the next year; food prices are expected to rise by 3.8%.
Fewer consumers expect to not be able to make minimum debt repayments over the next three months.

Locally, manufacturing production for October is due out today; production is expected to have increased by 0.3% y/y in October, after having declined by 0.8% y/y in September.
On a m/m basis, manufacturing production is likely to have increased by 0.6% in October, after flatlining in September.
Mining production for October is also due out today; mining output increased by 4.7% y/y in September.
Mining production increased by 3.8% m/m in September.

Brent crude oil is currently at $71.79/bbl; ($72.14/bbl*).
Gold is at $2669/oz ($2633/oz*).
SA CDS 175bps*, Brazil 171bps* and Turkey 243bps*.
Yields: US 10yr at 4.20%*, German bund at 2.12%*, SA 10-year generic at 10.11%*, SA’s R2035 at 10.15%*.

* Denotes yesterday’s close.

Key events and data:

Read PDF