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In the loop 06 December 2024

In the loop

Shireen Darmalingam

What you should know this morning:

  • The rand is stronger this morning, at R18.02/$, after closing stronger yesterday (R18.05/$*).
  • EM currencies were largely up yesterday; the RUB (+4.0%), PHP (+0.6%) and PLN (+0.6%) were the biggest gainers; the CLP (-0.2%) was the biggest loser.
  • Asian equity markets are mixed this morning; the Nikkei is down, while the Hang Seng and Shanghai Composite are up.
 
  • Central bank watch: the The Reserve Bank of India held rates steady, at 6.5%, today.
 
  • BOE policymaker Megan Greene commented yesterday that it would take time for consumer spending to recover.
  • Greene warned that the drag from mortgage rates might persist.
  • She noted “a stark difference” between the behaviour of consumers on both sides of the Atlantic since the end of the Covid pandemic.
  • She added that the surge in spending in the US hasn’t been seen in the Eurozone and the UK. 
  • Greene noted that interest rate cuts increase the motivation to spend rather than save.
  • However, many consumers locked in at higher rates after signing fixed interest rates, rather than face an increase in costs when refinancing mortgages, before inflation surged.
  • These types of mortgages dominate the market in Britain, typically for two- or five-year terms. 
 
  • The US non-farm payrolls (NFP) for November are in the spotlight today.
  • NFP are expected to have increased, by 220k, following an increase of 12k in October.
  • The unemployment rate is likely to have remained unchanged, at 4.1%, in November.
  • A lacklustre NFP print would most likely reflect negative cyclical dynamics.
  • The University of Michigan sentiment index is also on the cards today; the sentiment index is expected to have increased to 73.2 in November, from 71.8 in October.
 
  • Several Fed policymakers are due to speak on the US economy and monetary policy later today.
 
  • Locally, the SARB’s gross and net reserves for November are scheduled for release today. 
  • Gross reserves were $63.03bn in October, and net reserves were $61.2bn in October.
 
  • Brent crude is down this morning, and down by 6.5% year-to-date.
  • The gold price is up this morning, and up by 28.1% year-to-date.
 
  • Brent crude oil is currently at $72.05/bbl; ($72.09/bbl*).
  • Gold is at $2642/oz ($2628/oz*).
  • SA CDS 182bps*, Brazil 164bps* and Turkey 251bps*.
  • Yields: US 10yr at 4.17%*, German bund at 2.11%*, SA 10-year generic at 10.17%*, SA’s R2035 at 10.22%*.
 

* Denotes yesterday’s close. 

Key events and data:

  • 08h00: SA gross and net reserves (November)
  • 12h00: Eurozone GDP (Q3:24 – final), employment (Q3:24 – final)
  • 15h30: US non-farm payrolls (November), unemployment rate (November)
  • 17h00: US University of Michigan sentiment, 1yr and 5-10yr inflation expectations (December)
  • 22h00: US consumer credit (October)
 

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