In the loop 07 December 2021

In the loop

Shireen Darmalingam

What you should know this morning:

The rand is stronger this morning, at R15.87/$, after closing stronger yesterday y (R15.92/$*).
EM currencies were mixed yesterday; the ZAR (+1.0%), COP (+0.9%) and SGD (+0.2%) were amongst the biggest gainers; the HUF (-0.8%), TRY (-0.7%) and RUB (-0.7%) were amongst the biggest losers.
Asian equity markets the Nikkei, Hang Seng and Shanghai Composite are up.
Markets are steadier on easing concerns over the severity of the Omicron variant.
Still, there are some new restrictions being implemented across the world to curb this variant.

The RBA has kept its key rate unchanged at 0.1%.
The Australian economy has been rebounding strongly from lockdowns that ended in October; the bank however highlighted the Omicron variant’s threat to the recovery.
The RBA did not make any further changes to its emergency policy programs.
The IMF has said Australia’s ultra-easy policy has been instrumental in supporting this economy; however, policy tightening sooner may be warranted.
Markets are pricing in a rate lift-off in May.
The Reserve Bank of India has kept rates unchanged at a record low for a 9th straight meeting.

The IMF has indicated that the ECB should look through transitory inflation pressures to keep a "highly accommodative monetary policy stance”.
However, the IMF said that the central bank should be ready to normalise policy should high inflation prove persistent.
Inflation has surged to just shy of 5%, well above the ECB’s 2% target.
It was further noted that bank must clarify how support will be maintained after stimulus has been phased out.
The ECB will meet next week on policy; the governing council is expected to make several decisions regarding the asset purchase program.

SA has the 18th highest caseload, at 3.038 million; 6,381 new cases were reported yesterday.
Gauteng is the epicentre of the resurgence, with 70% of the new cases, followed by KwaZulu-Natal at 10% and Western Cape at 6%.
Active cases are at 86,728; Gauteng has 57,209 active cases, followed by KwaZulu-Natal with 7,913.
Covid-19 deaths rose by 9 yesterday, to 89,975; 2.861 million people (or 94.2%) have recovered from the virus.
19.785 million tests have been conducted since 5 March 2020; 24,159 tests were conducted yesterday.
The SA positivity rate is 26,4%.
26.490 million vaccines have been administered in SA to date; 133,468 vaccines were administered yesterday.

Gross and net reserves for November are due out this morning; net reserves are expected to have slipped to $55.2bn, from $55.43bn in October.
Q3:21 GDP is expected to have contracted by 0.7% q/q, from an increase of 1.2% q/q in Q2:21.

Brent crude oil is currently at $73.71/bbl; ($73.08/bbl*).
Gold is at $1778/oz ($1780/oz*).
SA CDS 229bps*, lower than Brazil 236bps* and Turkey 538bps*.
Yields: US 10yr at 1.44%*, German bund at -0.388%* and SA 10-year generic at 9.90%*, SA’s R186 at 7.88%*.

* Denotes yesterday’s close.

Key events and data:

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