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Closing the loop 21 October 2021

Closing the loop

Shireen Darmalingam

Market highlights:

  • The rand is weaker at R14.57/$ (R14.41/$*) today; it traded in a range of R14.35/$ to R14.60/$.
  • It is below its 50-day moving average (R14.74/$) and above its 100-day and 200-day moving averages (R14.52/$ and R14.56/$, respectively).
  • EM currencies were largely down today; the TRY (-2.7%), ZAR (-1.0%) and PLN (-0.6%) were amongst the biggest losers.
  • Pfizer remarked that a booster shot of their vaccine restored full protection, according to the results of a large study. 
  • The study showed that a booster jab was 95.6% effective against symptomatic Covid in the sample of 10,000 people aged 16 and older.
  • The results are likely to support the argument for administering a third dose more widely.
  • The Turkish Central Bank cut rates by 200 bps to 16% despite rising inflation and an ailing currency.
  • President Recep Tayyip Erdogan has asserted more control over the independent central bank in recent years.
  • He has been pushing for lower rates despite the upward inflation trend.
  • The Turkish lira has lost further ground on the back of the announcement.
  • Several PMI reports are due out tomorrow.
  • The UK October manufacturing and services PMI are expected to have slipped.
  • The EU PMI reports are also likely to have deteriorated in October, albeit remaining above the 50-benchmark line.
  • The US PMI data for October are likely to present a mixed bag with the manufacturing index slipping and the services index improving.
  • Also on the cards tomorrow is the release of the UK retail sales report for September; sales are expected to have contracted on a y/y basis.
  • The oil price is down by 1.5% today and up by 63.2% in the year-to-date.
  • The gold price is down by 0.3% today and down by 6.2% in the year-to-date.
  • Brent crude oil is at $84.54/bbl; ($85.82/bbl*).
  • Gold price is at $1780/oz ($1786/oz*).
  • SA CDS is at 208bps (207bps), lower than Brazil 218bps (212bps*) and Turkey 453bps (447bps*).
  • Yields: US 10yr at 1.67% (1.65%*), German bund at -0.091% (-0.126%*) and SA 10-year generic at 9.88% (9.78%*), SA’s R186 is at 7.93% (7.86%*).
  • The JSE ALSI is down by 1.2% today (+0.2%*).

* Denotes yesterday’s close. 

Key events and data:

  • 01h01: UK GfK consumer confidence (October
  • 01h30: Japan CPI (September)
  • 02h30: Japan Jibun Bank manufacturing, services and composite PMI (October)
  • 08h00: UK retail sales (September)
  • 10h00: Eurozone Markit manufacturing, services and composite PMI (October)
  • 10h30: Eurozone Markit manufacturing, services and composite PMI (October)15h45: US Markit manufacturing, services and composite PMI (October)

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