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In the loop 13 February 2024

In the loop

Shireen Darmalingam

What you should know this morning:

  • The rand is stronger this morning, at R18.91/$, after closing stronger yesterday (R18.92/$*).
  • EM currencies were mixed yesterday; the ZAR (+0.5%), PLN (+0.3%) and IDR (+0.3%) were the biggest gainers; the PHP (-0.2%), PEN (-0.1%) and CZK (-0.1%) were the biggest losers.
  • The Eurozone’s ZEW survey expectations for February are scheduled for release today.
  • Recall, the index slipped to 22.7 in January, from 23.0 in December.
  • The German ZEW survey, also due out today, will provide a sense of whether investor expectations have improved.
  • The index is likely to have increased, pointing to a more optimistic outlook for this region, supported by a solid labour market and the expectation that interest rates have peaked.
  • The UK ILO unemployment rate for December is expected to a have increased to 4.0% in December, from 3.9% in November.
  • The publication of the Labour Force Survey (LFS) will resume in the upcoming data today; questions over the quality of the survey remain.
  • Nonetheless, the LFS is expected to provide a more reliable way of assessing the performance of the labour market.
  • The wage data will also be watched closely.
  • Several US Fed policymakers commented on the US economy and monetary policy yesterday.
  • Fed Governor Michelle Bowman noted that it is still too soon to predict when rate cuts are likely to materialize.
  • Bowman added that she does not see rate cuts as appropriate “in the immediate future”.
  • Richmond Fed President Thomas Barkin commented that, while inflation has been moderating towards the bank’s 2% target, it is not quite there yet.
  • The US CPI for January is in the spotlight today and is expected to have eased to 2.9% y/y in January, from 3.4% y/y in December.
  • On a m/m basis, CPI is likely to have increased by 0.2% in January, matching December’s increase.
  • Core CPI is likely to come in at 3.7% y/y in January, from 3.9% y/y in December.
  • The key drivers of disinflation are likely to be car prices and housing rentals.
  • The US NFIB small business optimism index is also on the cards today and likely increased to 92.3 in January, from 91.9 in December.
  • The improvement in January is expected on the back of favourable consumer sentiment during the month.
  • Locally, mining production for December likely increased by 5.4% y/y, from an increase of 6.8% y/y in November.
  • On a m/m basis, mining production likely increased by 0.3% in December, from 2.1% in November.
  • Eskom: Stage 3 loadshedding is currently in place until 4pm when Stage 4 loadshedding will be implemented.
  • Brent crude is up this morning, and up by 6.5% year-to-date.
  • The gold price is up this morning, and down by 2.1% year-to-date.
  • Brent crude oil is currently at $82.07/bbl; ($82.00/bbl*).
  • Gold is at $2020/oz ($2019/oz*).
  • SA CDS 237bps*, Brazil 135bps* and Turkey 300bps*.
  • Yields: US 10yr at 4.17%*, German bund at 2.36%* and SA 10-year generic at 11.39%*, SA’s R2030 at 10.03%*.

* Denotes yesterday’s close.

Key events and data:

  • 08h00: Japan machine tool orders (January)
  • 09h00: UK ILO unemployment rate (December)
  • 11h30: SA mining production (December)
  • 12h00: Eurozone ZEW survey expectations (February)
  • 13h00: US NFIB small business optimism (January)
  • 15h30: US CPI (January)

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