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Closing the loop 10 January 2022

Closing the loop

Shireen Darmalingam

Market highlights:

  • The rand is weaker, at R15.71/$ (R15.58/$*) today; it ranged between R16.56/$ and R15.74/$.
  • The currency is below its 50-day moving average (R15.73/$) and above its 100-day and 200-day moving averages (R15.24/$ and R14.77/$ respectively).
  • EM currencies were mixed today; the RUB (+0.8%), INR (+0.4%) and IDR (+0.4%) were amongst the biggest gainers; the HUF (-0.9%), ZAR(-0.8%) and BRL (-0.8%) were amongst the biggest losers.
  • The Eurozone unemployment rate slipped to 7.2% in November, the lowest since March 2020, from 7.3% in October.
  • However, the November data does not incorporate the impact of the Omicron variant which was detected towards the end of the month.
  • The Omicron variant has disrupted economic activity and has forced some countries to re-impose lockdown restrictions.
  • This could see the labour market deteriorate in December; a decline in the unemployment rate is expected in 2022.
  • Japan’s leading and coincident indices for November, due out tomorrow, are expected to show an improvement.
  • The November data, however, will not have been impacted by the Omicron variant yet.
  • Locally, vehicles sales undershot expectations in December decreasing by 3.5% y/y from a 6.6% y/y increase in November.
  • 35,948 vehicles were sold in December; this compares with 37,250 sold in December 2020 and 41,630 vehicles sold in November 2021.
  • 24,949 passenger cars were sold in December compared to 24,541 passenger cars sold in December 2020; 8,990 light commercial vehicles were sold down from 10,784 sold in December 2020.
  • Total sales amounted to 464,122 in 2021 (22,1% y/y) from 380,206 in 2020.
  • Vehicle exports were up by 19.4% y/y to 21,430 units in December, compared with 17,943 units in December 2020.
  • Exports were up by 8.8% y/y in 2021 to 295,268 from 271,288 in 2020
  • The November manufacturing data is expected to have contracted, by 3,6% y/y, following a decline of 8.9% y/y in October.
  • Production is expected to have increased by 5.1% m/m from a decline of 5.9% m/m in October.
  • The oil price is down by 0.2% today, and up by 4.8% in the year-to-date.
  • The gold price is down by 0.2% today, and down by 6.8% in the year-to-date.
  • Brent crude oil is at $81.59/bbl; ($81.75/bbl*).
  • Gold price is at $1793/oz ($1796/oz*).
  • SA CDS is at 198bps (194bps*), Brazil 212bps (214bps*) and Turkey 576bps (573bps*).
  • Yields: US 10yr at 1.78% (1.76%*), German bund at -0.041% (-0.043%*) and SA 10-year generic at 9.89% (9.81%*), SA’s R186 is at 7.91% (7.787%*).
  • The JSE ALSI is up by 0.1% today (-0.3%*).

* Denotes Friday’s close. 

Key events and data tomorrow:

  • 07h00: Japan leading and coincident indices (November)
  • 13h00: SA manufacturing production (November)

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