In the loop 15 January 2025

In the loop

Shireen Darmalingam

What you should know this morning:

The rand is stronger this morning, at R18.92/$, after closing stronger yesterday (R18.93/$*).
EM currencies were mixed yesterday; the MXN (+1.2%), HUF (+0.9%) and PLN (+0.8%) were the biggest gainers; the RUB (-0.4%), ARS (-0.4%) and INR (-0.1%) were the biggest losers.
Asian equity markets are mixed this morning; the Nikkei and Hang Seng are up, while the Shanghai Composite is down.

Central bank watch: Bank Indonesia is likely to hold its key rate at 6.00% today.

Eurozone industrial production for November is due today; production is likely to have continued to struggle, with little sign of any improvement.
Industrial production is likely to have declined by 1.9% y/y in November, after having declined by 1.2% y/y in October.
Recent survey data implies the manufacturing sector as remaining the source of weakness in this economy in the near term.

UK CPI for December is expected to match November’s 2.6% y/y increase.
On a m/m basis, CPI is likely to have increased by 0.4% in December, following a 0.1% increase in November.
Fuel prices likely remained an upside risk to CPI in December.
Core CPI is expected to come in slightly lower, at 3.4% y/y in December, from 3.5% y/y in November.

Kansas City Fed President Jeff Schmidt remarked that interest rates might be ‘very close’ to neutral.
He noted a preference for slowing the pace of interest rate cuts.
This, however, only in “response to a sustained change in the tone of the data”.
He added that “the strength of the economy allows us to be patient”.

The US December CPI is in focus today and is likely to come in higher, at 2.9% y/y, from 2.7% y/y in November.
On a m/m basis, headline CPI is likely to have increased by 0.4% in December, following a 0.3% increase in November.
Core CPI is expected at 3.3% y/y in December, unchanged from November.
This is expected as an uptick in price gains of other goods and services likely offset continued improvement in housing rents inflation in December.
Also on the cards today will be the Empire manufacturing survey for January; consumer sentiment likely increased in January.
The manufacturing index is expected to have increased to 3.0% in January, from 0.2% in December.
The Fed’s Beige Book is also scheduled for release.

Brent crude oil is currently at $80.03/bbl; ($79.92/bbl*).
Gold is at $2675/oz ($2669/oz*).
SA CDS 202bps*, Brazil 192bps* and Turkey 273bps*.
Yields: US 10yr at 4.79%*, German bund at 2.65%*, SA 10-year generic at 10.61%*, SA’s R2035 at 10.64%*.

* Denotes yesterday’s close.

Key events and data:

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