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In the loop 31 January 2024

In the loop

Shireen Darmalingam

What you should know this morning:

  • The rand is unchanged this morning, at R18.81/$, after closing stronger yesterday (R18.81/$*).
  • EM currencies were mixed yesterday; the HUF (+1.0%), PLN (+0.7%) and CZK (+0.6%) were the biggest gainers; the RUB (-0.6%), PHP (-0.2%) and CLP (-0.1%) were the biggest losers.
  • Asian equity markets the Nikkei, Hang Seng and Shanghai Composite are down.
  • China’s composite PMI increased to 50.9 in January, from 50.3 in December.
  • The manufacturing PMI also increased in January, albeit still in contraction, to 49.2, from 49.0 in December.
  • New orders declined in January, suggesting that weak demand continues to hamper this economy ahead of the upcoming Lunar New Year holiday. 
  • The non-manufacturing PMI remained in expansion in January by increasing to 50.7, from 50.4 in December.
  • The US FOMC interest rate decision is in the spotlight today; the FOMC is largely expected to keep the Fed funds target range unchanged, at 5.25%-5.50%.
  • Investors will keep an eye on the policy statement for clues on how close, or far, the committee is from cutting rates.
  • Investors will also watch out for any clues on the completion of balance sheet normalisation.
  • Fed Chair Jerome Powell is expected to hold a press conference after the interest rate announcement.
  • The US Job Openings and Labour Turnover Survey (JOLTS) job openings for December overshot expectations, coming in at 9,026k (a 3-month high), from an upwardly revised 8,925k in November.
  • Fewer Americans quit their jobs, indicating that workers are becoming more cautious, even as labour demand remains strong.
  • The US private sector ADP employment payrolls for January are due for release today.
  • Private payrolls are likely to have increased by 150k in January, after having increased by 164k in December.
  • The ADP report is a precursor to the non-farm payrolls report for January, due out on Friday.
  • Non-farm payrolls (NFP) for January are expected to have increased by 185k, after having increased by 216k in December.
  • The unemployment rate is likely to have increased to 3.8% in January, from 3.7% in December.
  • Locally, the December trade balance is due out today; the surplus is likely to have compressed to R10bn, from a surplus of R29bn in November.
  • The SA monthly budget balance swung into a surplus of R19.5bn in December, from a deficit of R17.8bn in November.
  • Eskom: Stage 2 loadshedding is currently in place until 4pm, when Stage 3 loadshedding will be implemented.
  • Brent crude is down this morning, and up by 7.3% year-to-date.
  • The gold price is down this morning, and down by 1.4% year-to-date.
  • Brent crude oil is currently at $82.64/bbl; ($82.87/bbl*).
  • Gold is at $2033/oz ($2034/oz*).
  • SA CDS 224bps*, Brazil 136bps* and Turkey 327bps*.
  • Yields: US 10yr at 4.03%*, German bund at 2.26%* and SA 10-year generic at 11.14%*, SA’s R2030 at 9.78%*.

* Denotes yesterday’s close.

Key events and data:

  • 09h00: UK Nationwide house price index (January)
  • 14h00: SA trade balance (December)
  • 14h00: US MBA mortgage applications (26 January)
  • 15h15: US ADP employment report (January)
  • 21h00: US FOMC interest rate decision – no change expected

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