In the loop 01 December 2023

In the loop

Shireen Darmalingam

What you should know this morning:

The rand is stronger this morning, at R18.83/$, after closing weaker yesterday (R18.87/$*).
EM currencies were largely down yesterday; the RUB (-1.4%), HUF (-1.3%) and ZAR (-1.1%) were the biggest losers.
Asian equity markets the Nikkei, Hang Seng and Shanghai Composite are down.

Japan’s labour market remained tight in October; the unemployment rate slipped to 2.5%, from 2.6% in September.
The labour market is likely to continue tightening over the coming months.
The job-to applicant ratio increased to 1.30 in October, from 1.29 in September.

The UK Nationwide house prices are likely to have declined by 0.4% m/m in November, after having increased by 0.9% m/m in October.
On a y/y basis, house prices are likely to have declined by 2.1% in November, following a 3.3% y/y fall in October.
Signs that interest rates may have peaked may encourage activity in the coming months.
Still, mortgage rates are more than three times their level in 2022, which continues to weigh on households’ purchasing power and may also limit buyers’ offers.

China’s Caixin manufacturing PMI increased to 50.7 in November, from 49.5 in October.
This contrasts with China’s official manufacturing PMI, out yesterday, which showed factory activity falling for a second consecutive month.
The disparity between these two PMI measures adds to mixed signals over economic conditions.

US Fed Chair Jerome Powell is among several policymakers due to speak on the economy and monetary policy today.
Policymakers are preparing for the final FOMC meeting in December.
Investors are thus likely to keep an eye on comments for guidance on when the Fed might begin its cutting cycle.
Several policymakers have reiterated recently that the Fed should not be considering rate cuts just yet, supporting the narrative of higher rates for longer.
Comments from the Fed’s Austan Goolsbee and Vice Chair for Supervision Michael Barr will be watched.

Locally, the BER manufacturing PMI for November is due out today; the index likely slipped to 45.0, from 45.4 in October.
The November Naamsa vehicle sales are expected to have fallen by 5.6% y/y, after having declined by 2.0% y/y in October.
Eskom: Stage 3 loadshedding will be in place until 4pm today; Stage 4 loadshedding will follow after that until 5am tomorrow.

Brent crude oil is currently at $80.67/bbl; ($82.83/bbl*).
Gold is at $2040/oz ($2037/oz*).
SA CDS 236bps*, Brazil 146bps* and Turkey 334bps*.
Yields: US 10yr at 4.33%*, German bund at 2.44%* and SA 10-year generic at 11.26%*, SA’s R2030 at 9.96%*.

* Denotes yesterday’s close.

Key events and data:

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