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 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:

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