In the loop 20 January 2025

In the loop

Shireen Darmalingam

What you should know this morning:

The rand is stronger this morning, at R18.70/$, after closing stronger on Friday (R18.74/$*).
EM currencies were mixed on Friday; the CLP (+0.6%), RUB (+0.6%) and PEN (+0.4%) were the biggest gainers; the BRL (-0.4%), HUF (-0.3%) and RON (-0.3%) were the biggest losers.
Asian equity markets the Nikkei, Hang Seng and Shanghai Composite are up.

The annual meeting of the World Economic Forum 2025 will take place in Davos this week, from 20-24 January.

Central bank watch: Malaysia’s central bank is likely to hold rates steady on Wednesday.
The Central Bank of the Republic of Turkey (CBRT) is expected to cut its policy rate for a second time in the current cycle on Thursday, by 250 bps, to 45%.
The Bank of Japan (BOJ) is expected to hike its benchmark interest rate by 25 bps, to 0.5%, on Friday.

Japan’s CPI for December, due out on Friday, is expected to come in at 3.4% y/y, from 2.9% y/y in November.
The Jibun Bank PMI data for January is also due for release on Friday.

The inauguration of President-elect Donald Trump is due to take place today.
The US leading index is due out tomorrow and likely declined by 0.1% m/m in December, after having increased by 0.3% m/m in November.
US existing home sales, due out on Thursday, will likely have increased by 1.2% m/m in December, after having increased by 4.8% m/m in November.
The University of Michigan sentiment (final estimate) index for January is due out on Friday; the sentiment index is likely to have remained unchanged from its previous estimate, at 73.2.
The US flash PMI data for January are also scheduled for release on Friday; the manufacturing PMI is expected to have improved in January, while the services PMI is expected to have slipped.

Eurozone and UK flash PMI data for January are due out this week, providing an indication of how economic growth has been developing in Q1:25.
The Eurozone PMI will be watched closely to see whether the December rebound was a short-lived bounce or rather extended into 2025.
The UK composite PMI is likely to edge down in January as the recent financial market turmoil weighs on sentiment.
The UK labour data for the three months to November is on the cards tomorrow.
The jobs data is likely to show another uptick in pay growth.
A low response rate to the Labour Force Survey, however, continues to distort the survey results.

Locally, mining production for November is due out tomorrow; mining output is likely to have increased by 0.4% y/y in November, after having increased by 1.4% y/y in October.
Mining production decreased by 3.0% m/m in November.
The CPI data for December, which will aid in the SARB’s MPC in forming its decision next week, is scheduled for release on Wednesday.
CPI for December is expected to come in at 3.2% y/y, from 2.9% y/y in November.
On a m/m basis, CPI is expected to have increased by 0.3% in December, after having stagnated in November.
Core CPI is likely to come in at 3.8% y/y in December, from 3.7% y/y in November.
Retail sales for November, also due out on Wednesday, is expected to have increased by 5.1% y/y, following a 6.3% y/y increase in October.

Brent crude oil is currently at $80.68/bbl; ($80.79/bbl*).
Gold is at $2706/oz ($2703/oz*).
SA CDS 196bps*, Brazil 187bps* and Turkey 272bps*.
Yields: US 10yr at 4.62%*, German bund at 2.53%*, SA 10-year generic at 10.49%*, SA’s R2035 at 10.51%*.

* Denotes Friday’s close.

Key events and data:

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