Sign in
Research link-chevron Created with Sketch.
link-chevron Created with Sketch. Products and Services link-chevron Created with Sketch.
link-chevron Created with Sketch. Products and Services
Economics link-chevron Created with Sketch.
FX Report
The Loop
Inside China
Insights & Strategy
Equities link-chevron Created with Sketch.
Corporate Commissioned Research
Analysts
Analysts
Help and Support
Help and Support
Corporate and Investment Bank
Standard Bank Group
Closing the loop 24 November 2021

Closing the loop

Shireen Darmalingam

Market highlights:

  • The rand is weaker, at R15.93/$ (R15.84/$*) today; it ranged between R15.80/$ and R15.97/$.
  • The currency is above its 50-day, 100-day and 200-day moving averages (R15.07/$, R14.83/$ and R14.60/$ respectively).
  • EM currencies were mixed today; the TRY (+5.5%), CLP (+0.5%) and PHP (+0.5%) were amongst the biggest gainers; the MXN (-1.2%), RUB (-0.8%) and THB (-0.7%) were amongst the biggest losers.
  • US GDP (second estimate) for Q3:21 was revised up to 2.1% q/q (annualised) from 6.7% q/q (annualised) in Q2:21.
  • Improved growth was driven by an increase in consumer spending which grew by 1.7% in Q3:21.
  • Despite the improved print, headwinds such as supply chain bottlenecks, rising prices and a collapse in sentiment threatens to constrain household spending.
  • Growth could also be further weighed on by the resurgence in Covid infections.
  • The ECB’s October MPC meeting minutes are due out tomorrow.
  • Most policymakers expect the current surge in inflation to subside in 2022.
  • The bank is expected to keep the benchmark lending rate at 0% through to Q3:24.
  • Investors will be keeping an eye on policy guidance ahead of the December MPC meeting as the committee is expected to make decisions around its tapering programme.
  • ECB President Christine Lagarde signalled at the October meeting that tapering would likely end in March 2022.
  • Locally, the BER’s business confidence index remained unchanged at 43 pts in Q4:21, following the Q3:21 unrest.
  • Confidence amongst manufacturers and retailers slipped in Q4:21 while building sentiment improved.
  • The BER noted that sentiment was supported by the relaxing of lockdown measures to Level 1.
  • However, a 3-week strike in the steel industry as well as the resumption of loadshedding and the ongoing supply-chain disruptions prevented sentiment from recovering.
  • The BER further remarked that stock shortages and rising costs are holding back the economic recovery.
  • Vaccine hesitancy and the anticipated fourth wave could also weigh on sentiment in 2022.
  • PPI for October is scheduled for release tomorrow and is expected to have increased to 8.0% y/y from 7.8% y/y in September.
  • On a m/m basis, PPI is expected to have increased by 0.6% in October from September’s increase of 0.9%.
  • The oil price is down by 0.5% today, and up by 58.2% in the year-to-date.
  • The gold price is down by 0.1% today, and down by 6.1% in the year-to-date.
  • Brent crude oil is at $81.93/bbl; ($82.31/bbl*).
  • Gold price is at $1781/oz ($1784/oz*).
  • SA CDS is at 222bps (222bps), lower than Brazil 248bps (248bps*) and Turkey 471bps (487bps*).
  • Yields: US 10yr at 1.68% (1.66%*), German bund at -0.204% (-0.220%*) and SA 10-year generic at 10.17% (10.08%*), SA’s R186 is at 8.15% (8.09%*).
  • The JSE ALSI is down by 0.9% today (+0.2%*).

* Denotes yesterday’s close. 

Key events and data:

  • 07h00: Japan leading and coincident indices (September)
  • 08h00: Japan machine tool orders (October)
  • 11h30: SA PPI (October)
  • 14h30: Eurozone ECB publishes October MPC minutes 

Read PDF