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In the loop 13 October 2021

In the loop

Shireen Darmalingam

What you should know this morning:

  • The rand is unchanged this morning, at R14.95/$, after closing stronger yesterday (R14.95/$*).
  • EM currencies were mixed yesterday; the THB (+1.3%), COP (+1.1%) and PEN (+0.8%) were amongst the biggest gainers; the HUF (-0.5%), TWD (-0.4%) and CZK (-0.4%) were amongst the biggest losers.
  • Asian equity markets are mixed this morning; the Nikkei and Hang Seng are up, while the Shanghai Composite is down.
  • Covid-19 global update: cases have surpassed 239.49 million, while the death toll has surpassed 4.88 million; recoveries are at 216.86 million.
  • The US has 45.43 million cases, accounting for 18% of global cases; the US death toll is 737,589. 
  • India has 34 million cases and 451,220 deaths; Brazil has 21.59 million cases and 601,442 deaths.
  • Atlanta Fed President Raphael Bostic has commented about US inflation becoming more broad-based.
  • Bostic remarked that price increases caused by supply-chain disruptions and the reopening of the services sector are likely to prove lasting. 
  • US CPI data for September later today is expected to remain elevated, at 5.3% y/y.
  • Bostic is comfortable with the tapering process kicking off in November; St. Louis Fed President James Bullard has supported this view. 
  • Vice Chair Richard Clarida, however, reiterated that price pressures are likely not permanent and that stagflation isn't a concern.
  • Janet Yellen too expects elevated inflation to be transitory but added that it would take time for the pace of price gains to return to normal.
  • The FOMC meeting minutes for September are due out today.
  • China’s trade surplus widened in September as export growth defied expectations of a slowdown amid a countrywide power crunch that forced factories to cut production. 
  • Exports have been a driver for this economy’s rebound from the pandemic, which has helped offset weak domestic spending.
  • However, challenges such as high freight costs, raw material prices, electricity shortages and environmental constraints may still dampen exports. 
  • SA has the 17th highest caseload, at 2.912 million; 592 new cases were reported yesterday.
  • Active cases are at 27,066; KwaZulu-Natal leads the way, with 13,052 active cases, followed by the Western Cape with 3,965.
  • Covid-19 deaths rose by 83 yesterday, to 88,429; 2.797 million people (or 96%) have recovered from the virus.
  • 18.016 million tests have been conducted since 5 March 2020; 27,929 tests were conducted yesterday.
  • The positivity rate is 2.1%.
  • 19.461 million vaccines have been administered to date; 205,681 vaccines were administered yesterday.
  • Brent crude oil is down this morning, and up by 60.8% year-to-date.
  • The gold price is up marginally this morning, and down by 7.2% year-to-date.
  • Brent crude oil is currently at $83.32/bbl; ($83.42/bbl*).
  • Gold is at $1762/oz ($1760/oz*).
  • SA CDS 220bps*, higher than Brazil 209bps* and lower than Turkey 443bps*.
  • Yields: US 10yr at 1.57%*, German bund at -0.086%* and SA 10-year generic at 9.96%*, SA’s R186 at 7.90%*.

* Denotes yesterday’s close.

Key events and data: 

  • 08h00: UK industrial production (August), manufacturing production (August), trade balance (August), GDP (August)
  • 11h00: Eurozone industrial production (August)
  • 13h00: SA retail sales (August)
  • 13h00: US MBA mortgage applications (8 October)
  • 14h30: US CPI (September)
  • 20h00: US FOMC meeting minutes (22 September)

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