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In the loop 11 January 2022

In the loop

Shireen Darmalingam

What you should know this morning:

  • The rand is stronger this morning, at R15.67/$, after closing weaker yesterday (R15.70/$*).
  • EM currencies were mixed yesterday; the RUB (+1.0%), INR (+0.4%) and IDR (+0.4%) were amongst the biggest gainers; the CLP (-0.9%), ZAR (-0.8%) and BRL (-0.6%) 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.
  • The US CDC has raised its travel advisory for Canada to Level 4, the highest level, and has advised against travel to Canada. 
  • The CDC also advises against travel to France, Spain and Sweden.
  • Japan is expected to extend is border measures until the end of February as cases surge.
  • Pfizer is developing a hybrid vaccine that combines its original jab with a formulation that protects against the Omicron variant.
  • Fed Chair Jerome Powell has commented that the Fed will keep inflation from becoming entrenched, but post-pandemic growth may look different from previous expansions.
  • Powell commented that the US economy has rapidly gained strength despite the ongoing pandemic.
  • This has led to persistent supply and demand imbalances, bottlenecks and elevated inflation.
  • Powell is due to testify before the Senate today and will likely be questioned on rising inflation concerns.
  • US CPI for December, due on Wednesday, is expected to have increased to 7% y/y, the biggest advance in almost 40 years, from 6.8% y/y in November. 
  • This could see more Fed officials signal appetite for rate hikes as soon as the March FOMC meeting.
  • Japan’s leading index increased to 103 pts in November, from 101.9 pts in October.
  • The coincident index, which measures current economic conditions, also increased, to 93.6 pts, from 89.8 pts in October. 
  • SA has the 18th highest caseload, at 3.526 million; 2,409 new cases were reported yesterday.
  • Active cases are at 144,355; KwaZulu-Natal leads the way, with 60,824 active cases, followed by the Western Cape with 25,159.
  • Covid-19 deaths rose by 77 yesterday, to 92,530; 3.291 million people (or 93.3%) have recovered from the virus.
  • 21.570 million tests have been conducted since 5 March 2020; the positivity rate is at 14%.
  • 28.417 million vaccines have been administered in SA to date; 83,842 vaccines were administered yesterday.
  • 15.8 million people, or 39.78% of the adult population, have been fully vaccinated.
  • The November manufacturing data is expected to have contracted, by 3,6% y/y, following a decline of 8.9% y/y in October.
  • Production is expected to have increased by 5.1% m/m, from a decline of 5.9% m/m in October.
  • The EIA will release its short-term energy outlook today.
  • Brent crude oil is up this morning, and up by 4.4% year-to-date.
  • The gold price is up this morning, and down by 1.2% year-to-date.
  • Brent crude oil is currently at $81.28/bbl; ($80.87/bbl*).
  • Gold is at $1806/oz ($1799/oz*).
  • SA CDS 200bps*, Brazil 216bps* and Turkey 580bps*.
  • Yields: US 10yr at 1.76%*, German bund at -0.034%* and SA 10-year generic at 9.91%*, SA’s R186 at 7.93%*.

* Denotes yesterday’s close.

Key events and data: 

  • 07h00: Japan leading and coincident indices (November)
  • 13h00: SA manufacturing production (November)

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