In the loop
Shireen Darmalingam
What you should know this morning:
- The rand is weaker this morning, at R18.96/$, after closing weaker on Friday (R18.66/$*).
- EM currencies were mixed on Friday; the BRL (+0.5%), CLP (+0.4%) and THB (+0.2%) were the biggest gainers; the KRW (-1.6%), MYR (-1.5%) and COP (-1.2%) were the biggest losers.
- Asian equity markets: the Nikkei and Hang Seng are down.
- Central bank watch: the BOE is due to meet on Thursday and is largely expected to cut its benchmark interest rate by 25 bps, to 4.5%.
- The Riksbank policy decision minutes is expected tomorrow; the bank communicated in January that it might be done with cutting rates.
- The National Bank of Poland is likely to hold its main interest rate steady on Wednesday.
- The Reserve Bank of India is expected to cut its key rate by 25 bps, to 6.25%, on Friday.
- China’s Caixin manufacturing PMI unexpectedly declined for a second straight month in January, to 50.1, from 50.5 in December.
- This slippage came on the back of a drop in employment and sluggish external demand.
- Caixin noted that rising uncertainty in international policies could worsen China’s export environment, posing significant challenges for this economy.
- Eurozone CPI for January is scheduled for release today; CPI is expected at 2.4% y/y, matching December’s increase.
- German industrial production for December is due out on Friday and likely fell, following a stronger-than-expected uptick in November.
- The UK’s Decision Maker Panel 3m and 1yr inflation expectations are due out on Thursday.
- The US ISM manufacturing index for January is due out today; an increase to 49.9 in January is expected from 49.2 in December.
- The ISM services index for January, due for release on Wednesday, likely increased to 54.1, from 54.0 in December.
- The US Job Openings and Labour Turnover Survey (JOLTS) job openings for December, scheduled for release tomorrow, are likely to have slipped to 8.0 million, from 8.098 million in November.
- Non-farm payrolls (NFP) for January, in the spotlight on Friday, are expected to slip to 170k, following an increase of 256k in December.
- The unemployment rate is likely to have remained unchanged at 4.1% in January.
- The University of Michigan’s consumer sentiment index for January is likely to have improved, based on how consumers spent towards the end of the year.
- US President Donald Trump has announced tariffs of 25% on specific goods from Canada and Mexico, and 10% on China and Canadian energy, effective tomorrow.
- Trump has also threatened the EU with tariffs.
- Locally, the BER manufacturing PMI for January is due for release today; the index is slipped to 46.2 in December, from 48.1 in November.
- The January Naamsa vehicle sales also due today; vehicle sales increased by 1.9% y/y in December.
- The industry-wide PMI for January is due out on Wednesday; the index is currently just below the 50-benchmark, at 49.9.
- President Cyril Ramaphosa will deliver the State of the Nation Address (SONA) on Thursday.
- Electricity production and consumption for December are scheduled for release on Thursday.
- The SARB’s gross and net reserves for January are scheduled for release on Friday.
- Gross reserves came in at $65.46bn in December, while net reserves are at $60.37bn in December.
- Net reserves are likely to have increased to $61.1bn in January.
- The SACCI business confidence data for January is scheduled for release this week; business confidence rose to 118.1 in November.
- Eskom yesterday suspended loadshedding following the recovery of emergency reserves.
- The utility said that it had replenished those reserves, with dam levels fully replenished and open-cycle gas turbines adequately recovered, ensuring stable supply.
- Brent crude is down this morning, and up by 2.4% year-to-date.
- The gold price is down this morning, and up by 6.0% year-to-date.
- Brent crude oil is currently at $76.42/bbl; ($76.76/bbl*).
- Gold is at $2782/oz ($2798/oz*).
- SA CDS 194bps*, Brazil 177bps* and Turkey 254bps*.
- Yields: US 10yr at 4.53%*, German bund at 2.46%*, SA 10-year generic at 10.36%*, SA’s R2035 at 10.38%*.
* Denotes Friday’s close.
Key events and data:
- 11h00: SA BER PMI (January)
- 11h00: Eurozone HCOB manufacturing PMI (January – final)
- 11h30: UK S&P Global manufacturing PMI (January – final)
- 12h00: Eurozone CPI (January)
- 16h45: US S&P Global manufacturing PMI (January – final)
- 17h00: US ISM manufacturing PMI (January)
- SA Naamsa vehicle sales (January)
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