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Closing the loop 24 January 2022

Closing the loop

Shireen Darmalingam

Market highlights:

  • The rand is weaker, at R15.26/$ (R15.10/$*) today; it ranged between R15.08/$ and R15.28/$.
  • The currency is below its 50-day and 100-day moving averages (R15.75/$ and R15.31/$, respectively) and above its 200-day moving average (R14.81/$).
  • EM currencies were mixed today; the PHP (+0.2%), CNY (+0.2%) and TRY (+0.2%) were amongst the biggest gainers; the RUB (-2.3%), PLN (-1.1%) and ZAR (-1.0%) were amongst the biggest losers.
  • The UK Markit composite PMI undershot expectations in January and slipped to 53.4 pts from 53.6 pts in December.
  • The services PMI fell in January as the Omicron variant limited activity, especially demand for consumer facing services.
  • The manufacturing PMI also fell in January.
  • The Eurozone Markit composite for January also fell, to 52.4 pts from 53.3 pts in December.
  • The fall was driven by the slippage in the services PMI; the manufacturing PMI, however, increased in January.
  • The US Conference Board consumer confidence for January is scheduled for release tomorrow.
  • Confidence is expected to have fallen in January to 111.5 pts from 115.8 pts in December on the back of the Omicron impact.
  • The confidence index is sensitive to labour market movements; the recent increase in jobless claims does not bode well for sentiment.
  • The IMF’s January World Economic Outlook is due out tomorrow.
  • The IMF has warned of downward revisions to its global growth outlook of 4.9% for 2022. 
  • Locally, the SARB’s November leading indicator is due out tomorrow.
  • The leading indicator increased slightly to 125.2 pts in October from 125 pts in September.
  • However, the index has largely been on a downward trend since its recent high of 136 pts in May 2021.
  • The oil price is down by 1.6% today, and up by 11.2% in the year-to-date.
  • The gold price is up by 0.1% today, and up by 0.5% in the year-to-date.
  • Brent crude oil is at $86.48/bbl ($87.89/bbl*).
  • Gold price is at $1837/oz ($1835/oz*).
  • SA CDS is at 210bps (202bps*), Brazil 223bps (219bps*) and Turkey 528bps (524bps*).
  • Yields: US 10yr at 1.74% (1.76%*), German bund at -0.084% (-0.065%*) and SA 10-year generic at 9.72% (9.65%*), SA’s R186 is at 7.65% (7.62%*).
  • The JSE ALSI is down by 2.9% today (-1.8%*).

* Denotes Friday’s close. 

Key events and data tomorrow:

  • 09h00: SA leading indicator (November)
  • 16h00: IMF World Economic Outlook
  • 17h00: US Conference Board consumer confidence (January)

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