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Closing the loop 25 November 2021

Closing the loop

Shireen Darmalingam

Market highlights:

  • The rand is stronger, at R15.88/$ (R15.92/$*) today; it ranged between R15.81/$ and R15.92/$.
  • The currency is above its 50-day, 100-day and 200-day moving averages (R15.10/$, R14.85/$ and R14.61/$ respectively).
  • EM currencies were mixed today; the TRY (+1.8%), HUF (+1.1%) and RUB (+0.4%) were amongst the biggest gainers; the CLP (-0.8%), MXN (-0.5%) and MYR (-0.5%) were amongst the biggest losers.
  • The ECB MPC minutes noted that the bank was keeping sufficient optionality to allow for future monetary-policy actions.
  • Policymakers noted that uncertainty over inflation outlook warranted the bank to keep an open mind.
  • The ECB sees inflation below 2% in medium term.
  • Supply-chain bottlenecks and high energy prices were noted as upside risks to the inflation outlook.
  • The minutes highlighted that an increase in near-term rates was likely due to inflation risks.
  • The Swedish Riksbank left policy rates unchanged today, but incorporated a future rise in rates for the first time.
  • A rate hike is only expected in H2:24.
  • Locally, the October PPI overshot expectations coming in at 8.1% y/y from an increase of 7.8% y/y in September.
  • On a m/m basis, PPI was up by 0.7% in October from September’s 0.9% increase.
  • The WHO is meeting to discuss the new variant of the virus circulating in SA, Botswana and Hong Kong.
  • There is concern that the number of mutations could enable the virus to evade immunity.
  • The NICD noted that SA currently has 22 detected cases, predominantly in Gauteng.
  • The oil price is down by 0.1% today, and up by 58.6% in the year-to-date.
  • The gold price is up by 0.3% today, and down by 5.7% in the year-to-date.
  • Brent crude oil is at $82.15/bbl; ($82.25/bbl*).
  • Gold price is at $1790/oz ($1785/oz*).
  • SA CDS is at 223bps (223bps), lower than Brazil 249bps (250bps*) and Turkey 476bps (475bps*).
  • Yields: US 10yr at 1.63% (1.63%*), German bund at -0.238% (-0.228%*) and SA 10-year generic at 10.13% (10.16%*), SA’s R186 is at 8.15% (8.17%*).
  • The JSE ALSI is down by 0.1% today (-0.6%*).

* Denotes yesterday’s close. 

Key events and data:

  • 11h00: Eurozone M3 money supply (October)

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