In the loop 11 December 2024

In the loop

Shireen Darmalingam

What you should know this morning:

The rand is stronger this morning, at R17.81/$, after closing weaker yesterday (R17.84/$*).
EM currencies were mixed yesterday; the BRL (+0.5%), PEN (+0.2%) and CNY (+0.1%) were the biggest gainers; the RUB (-3.0%), CLP (-0.6%) and ZAR (-0.6%) were the biggest losers.
Asian equity markets are mixed this morning; the Nikkei and Hang Seng are down, while the Shanghai Composite is up.

Central bank watch: Brazil’s central bank is expected to hike the Selic rate by 75 bps today.
The Bank of Canada is also likely to reduce rates today as it moves towards a neutral stance.

Chinese President Xi Jinping yesterday commented that China would meet its GDP growth target of 5% for 2024.
The president added that China would remain the engine of global economic expansion.
These comments follow recently announced steps to boost flagging investor confidence.
The Politburo yesterday expressed support for further monetary easing and a more accommodative policy stance.

The US November CPI, in focus today, is likely to come in at 2.7% y/y, from 2.6% y/y in October.
On a m/m basis, headline CPI is likely to have increased by 0.3% in November, from a 0.2% increase in October.
Core CPI is expected to have remained unchanged, at 3.3% y/y, in November.
Today’s data will be important in informing whether the Fed cuts rates further at next week’s FOMC meeting or whether it decides to pause its cutting cycle.

Investors are keeping an eye on the ECB policy meeting tomorrow.
The ECB is largely expected to cut its benchmark interest rate by 25 bps for a fourth consecutive meeting tomorrow.
A deteriorating economic outlook supports the case for the ECB to cut rates further.

Locally, CPI for November is scheduled for release today and is expected at 3.1% y/y, from 2.8% y/y in October.
On a m/m basis, CPI is expected to have increased by 0.2% in November, after having decreased by 0.1% in October.
Core CPI is likely to come in at 3.8% y/y in November, from 3.9% y/y in October.
Retail sales for October, also due out today, are expected to have increased by 2.0% y/y, following 0.9% y/y increase in September.
Retail sales were down by 0.8% m/m in September.

Brent crude oil is currently at $72.59/bbl; ($72.19/bbl*).
Gold is at $2677/oz ($2694/oz*).
SA CDS 178bps*, Brazil 168bps* and Turkey 247bps*.
Yields: US 10yr at 4.22%*, German bund at 2.12%*, SA 10-year generic at 10.15%*, SA’s R2035 at 10.19%*.

* Denotes yesterday’s close.

Key events and data:

Read PDF