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In the loop 12 February 2024

In the loop

Shireen Darmalingam

What you should know this morning:

  • The rand is weaker this morning, at R19.04/$, after closing weaker on Friday (R19.02/$*).
  • EM currencies were mixed on Friday; the BRL (+0.9%), COP (+0.7%) and HUF (+0.5%) were the biggest gainers; the CLP (-0.5%), THB (-0.3%) and TRY (-0.3%) were the biggest losers.
  • Japan’s Q4:23 GDP data, due out on Thursday, likely increased by 1.1% q/q, after having declined by 2.9% q/q in Q3:23.
  • The BOJ will keep a close eye on the data to assess whether this economy is ready for the first interest rate hike in almost two decades.
  • India’s CPI for January, due out today, likely moderated to 5.0% y/y, from 5.7% y/y in December.
  • The broader trend is for CPI to have eased to the Reserve Bank of India’s (RBI) 4% medium-term target by mid-2025.
  • UK inflation, wages and GDP data due out this week will likely support the BOE’s case to ease monetary policy in H1:24.
  • UK CPI for January is expected to have increased, albeit only slightly, on the back of an increase in energy and services prices.
  • An increase may prove temporary; headline CPI is on course to moderate towards the BOE’s inflation target later this year.
  • The BOE will also keep a close eye on wage growth figures due out this week; a continued cooling in the pace of gains is expected.
  • GDP for Q4:23 is expected to show a second consecutive quarterly contraction in output. 
  • Eurozone industrial production for December is expected to have declined slightly in December due to the contraction in German output.
  • The Bank of Russia will meet on Friday to decide on monetary policy; rates are expected to remain on hold.
  • Annual revisions to the US inflation data, out last week Friday, didn’t change the disinflation narrative for 2023.
  • The US CPI for January is in the spotlight this week (Tuesday) and is expected to have eased to 2.9% y/y in January, from 3.4% y/y in December.
  • Core CPI is likely to come in at 3.7% y/y in January, from 3.9% y/y in December.
  • Economic data out this week will provide clues on consumer health and the labour market.
  • Retail sales for January, due out on Thursday, are expected to reflect subdued spending. 
  • Downward revisions to the strong sales in December are expected. 
  • The University of Michigan sentiment survey for February is due out on Friday; sentiment likely improved further in early February after January’s outcome hit the highest level since July 2021.
  • Housing starts for January are also on the cards this week as well as annual revisions to the PPI data.
  • Locally, mining production for December, due out tomorrow, likely increased by 5.4% y/y, from an increase of 6.8% y/y in November.
  • On a m/m basis, mining production likely increased by 0.3% in December, from 2.1% in November.
  • Retail sales for December are due out on Wednesday; sales are likely to have fallen further, by 0.4% y/y, following a decline of 0.9% in November.
  • Retail sales are expected to have increased by 0.2% m/m in December, from an increase of 0.4% m/m in November.
  • Eskom: Stage 5 loadshedding continues until further notice.
  • Brent crude is down this morning, and up by 6.3% year-to-date.
  • The gold price is up this morning, and down by 1.9% year-to-date.
  • Brent crude oil is currently at $81.87/bbl; ($82.19/bbl*).
  • Gold is at $2023/oz ($2024/oz*).
  • SA CDS 236bps*, Brazil 136bps* and Turkey 310bps*.
  • Yields: US 10yr at 4.17%*, German bund at 2.38%* and SA 10-year generic at 11.28%*, SA’s R2030 at 9.93%*.

* Denotes Friday’s close.

Key events and data:

  • 18h00: US NY Fed 1-year inflation expectations (January)

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