In the loop 09 December 2024

In the loop

Shireen Darmalingam

What you should know this morning:

The rand is weaker this morning, at R18.05/$, after closing stronger on Friday (R18.02/$*).
EM currencies were mixed on Friday; the THB (+0.8%), RUB (+0.7%) and PHP (+0.2%) were the biggest gainers; the BRL (-1.3%), CLP (-0.5%) and KRW (-0.5%) were the biggest losers.
Asian equity markets are mixed this morning; the Nikkei is up, while the Hang Seng and Shanghai Composite are down.

Central bank watch: the ECB will meet on Thursday and is expected to cut its benchmark interest rate by 25 bps for a fourth consecutive meeting.
A deteriorating economic outlook supports the case for the ECB to cut further.
The Swiss National Bank (SNB) is also expected to cut rates for a fourth time on Thursday.
The Bank of Canada is also likely to reduce rates as it moves towards a neutral stance.
The Reserve Bank of Australia is likely to hold the cash rate target steady tomorrow.
Brazil’s central bank is expected to hike the Selic rate by 75 bps on Wednesday.

Chinese CPI came in lower than expected in November, at 0.2% y/y, from 0.3% y/y in October.
Chinese credit data will likely show household and business demand as remaining weak.

Eurozone industrial production for October is due on Friday; production is like to have been dragged down by the weakness in Germany.

The US November CPI will be in focus this week on Wednesday and 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.
The NFIB small business optimism index for November, due out tomorrow, is likely to have improved, to 94.5, from 93.7 in October.
Headline producer price growth likely accelerated 2.6% y/y in November, from 2.4% y/y in October.

Locally, manufacturing production for October is due out tomorrow; production is expected to have increased by 0.3% y/y in October, after having declined by 0.8% y/y in September.
On a m/m basis, manufacturing production is likely to have increased by 0.6% in October, after flatlining in September.
Mining production for October is also due out tomorrow; mining output increased by 4.7% y/y in September.
Mining production increased by 3.9% m/m in September.
The November PPI is also on the cards tomorrow and is expected at 0.2% y/y, from -0.7% y/y in October.
CPI for November is scheduled for release on Wednesday 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 on Wednesday, 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.
The Q3:24 non-farm payrolls are due out on Thursday; payrolls increased by 0.4% q/q in Q2:24.
The BER inflation expectations survey for Q3:24 are also due on Thursday.

Brent crude oil is currently at $71.53/bbl; ($71.12/bbl*).
Gold is at $2637/oz ($2633/oz*).
SA CDS 177bps*, Brazil 164bps* and Turkey 248bps*.
Yields: US 10yr at 4.15%*, German bund at 2.10%*, SA 10-year generic at 10.15%*, SA’s R2035 at 10.20%*.

* Denotes Friday’s close.

Key events and data:

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