In the loop
Shireen Darmalingam
What you should know this morning:
- The rand is weaker this morning, at R18.55/$, after closing stronger on Friday (R18.40/$*).
- EM currencies were mixed on Friday; the RUB (+2.0%), MYR (+1.5%) and COP (+1.3%) were the biggest gainers; the PEN (-0.1%) and TRY (-0.1%) were the biggest losers.
- Asian equity markets are mixed this morning; the Nikkei is down, while the Hang Seng and Shanghai Composite are up.
- Central bank watch: the US Fed and ECB central banks are due to make policy decisions this week, on Wednesday and Thursday respectively.
- The Fed is expected to keep its Fed funds rate unchanged, while the ECB is expected to cut its benchmark interest rate by 25 bps.
- The SARB will meet on Thursday and is largely expected to cut the repo rate by 25 bps, to 7.50%.
- The central banks of Chile, Brazil, Canada, Pakistan, Sweden and Sri Lanka will meet this week to decide on monetary policy.
- China’s manufacturing PMI deteriorated in January and slipped to 49.1, from 50.1 in December.
- Both the non-manufacturing and composite PMIs also deteriorated in January but remained in expansionary territory.
- China’s industrial profits declined 3.3% in the 12 months through to December.
- Japan’s industrial output tor December, due on Friday, likely rebounded in December on production of semiconductor-related items to meet strong global demand.
- The German IFO survey for January is due out today and will provide more information about how the German economy is faring at the start of the year.
- The ECB’s quarterly Bank Lending Survey is scheduled for release tomorrow; the survey results will likely show that demand for, and supply of credit, are improving.
- The Eurozone GDP for Q4:24 is due out on Thursday; GDP is expected to have only posted 0.1% q/q growth in the final quarter, from 0.4% q/q in Q3:24.
- Business surveys have suggested that momentum faded during H2:24.
- Several other Eurozone economies’ GDP for Q4:24 are also on the cards this week.
- ECB President Christine Lagarde and policymakers Robert Holzmann, Peter Kazimir and Boris Vujcic are due to speak this week.
- The UK Nationwide house price survey for January is scheduled for release on Friday.
- US new homes sales for December are due out today; sales are expected to have increased further in December, by 2.4% m/m, following a 5.9% m/m increase in November.
- Durable goods orders for December, due tomorrow, are expected to have increased by 0.5% m/m, following a 1.2% m/m decline in November.
- Durable goods excluding transportation likely improved in December.
- The US Q4:24 GDP, out on Thursday, is expected to come in at 2.7%% q/q in Q4:24, from 3.1% q/ in Q3:24.
- Real personal consumption expenditure likely recorded very strong growth in Q4:24.
- Personal income and spending for December are scheduled for release on Friday.
- The core PCE deflator is expected to have increased by 0.2% m/m in December, following a 0.1% m/m increase in November.
- Locally, the SARB’s leading indicator for November is scheduled for release tomorrow; the index increased to 114.0 in October.
- The M3 and private sector credit extension (PSCE) for December are due out on Thursday.
- PSCE is likely to come in at 4.13% y/y in December, from 4.16% y/y in October.
- The December PPI is on the cards on Thursday and is expected at 0.8% y/y, from -0.1% y/y in November.
- The monthly Budget balance data for December is also due Thursday; the budget deficit came in at R4.5bn in November.
- The December trade balance is scheduled for release on Friday; a trade surplus of R29.2bn is expected, from R34.7bn in November.
- Brent crude is down this morning, and up by 4.4% year-to-date.
- The gold price is down this morning, and up by 5.0% year-to-date.
- Brent crude oil is currently at $77.93/bbl; ($78.50/bbl*).
- Gold is at $2755/oz ($2770/oz*).
- SA CDS 191bps*, Brazil 174bps* and Turkey 259bps*.
- Yields: US 10yr at 4.62%*, German bund at 2.56%*, SA 10-year generic at 10.31%*, SA’s R2035 at 10.33%*.
* Denotes Friday’s close.
Key events and data:
- 11h00: Germany IFO business survey (January)
- 17h00: US new home sales (December)
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