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In the loop 31 January 2025

In the loop

Shireen Darmalingam

What you should know this morning:

  • The rand is weaker this morning, at R18.56/$, after closing stronger yesterday (R18.48/$*).
  • EM currencies were mixed yesterday; the RUB (+1.0%), CLP (+0.8%) and MXN (+0.4%) were the biggest gainers; the IDR (-0.5%), BRL (-0.2%) and PEN (-0.1%) were the biggest losers.
  • Asian equity markets: the Nikkei is up; Chinese markets are closed for the New Year holidays.
 
  • Eurozone GDP undershot expectations in Q4:24, coming in at 0.0% q/q, after having increased by 0.4% q/q in Q3:24.
  • GDP growth was dragged down by growth contractions in Germany and France.
  • However, growth in Spain and Italy improved in Q4:24.
  • Eurozone consumer confidence improved to -14.2 (final estimate) in January, from -14.5 in December.
  • Economic confidence increased in January, to 95.2, from 93.7 in December.
  • The gauge for confidence in the services sector remained unchanged in December, while confidence in the construction sector improved. 
 
  • Eurozone inflation expectations for 1 year and 3 years ahead for December are scheduled for release later today.
  • One-year-ahead inflation expectations are expected at 2.7% in December, from 2.6% in November.
  • Three-year-ahead inflation expectations are likely to have remained unchanged, at 2.4%, in December.
 
  • US GDP growth undershot expectations in Q4:24, increasing by 2.3% q/q (annualised), after having increased by 3.1% q/q (annualised) in Q3:24.
  • The increase was driven largely by consumer and business spending.
  • Wage increases and employment drove growth in the final quarter.
  • US personal income and spending for December are scheduled for release today.
  • 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 National Energy Regulator of South Africa (Nersa) has allowed Eskom to raise electricity tariffs by 12.7% in its next financial year.
  • The price increase is effective from 1 April 2025; Eskom had requested a 36% increase.
  • Eskom based its request on several factors, including that the regulator had not allowed Eskom to recover the cost of producing electricity for many years.
  • Eskom also cited the increase in municipal debt from local governments not paying their accounts as a significant risk. 
  • Nersa also approved tariff increases of 5.36% for 2027 and 6.19% for 2028.
 
  • The December trade balance is due out today; a trade surplus of R28.9bn is expected, from R34.7bn in November. 
 
  • Brent crude is up this morning, and up by 3.6% year-to-date.
  • The gold price is up this morning, and up by 6.6% year-to-date.
 
  • Brent crude oil is currently at $77.48/bbl; ($76.87/bbl*).
  • Gold is at $2797/oz ($2795/oz*).
  • SA CDS 193bps*, Brazil 179bps* and Turkey 257bps*.
  • Yields: US 10yr at 4.51%*, German bund at 2.51%*, SA 10-year generic at 10.29%*, SA’s R2035 at 10.31%*.
 

* Denotes yesterday’s close. 

Key events and data:

  • 09h00: UK Nationwide house price index (January)
  • 11h00: Eurozone 1 yr and 3 yr inflation expectations (December)
  • 14h00: SA trade balance (December)
  • 15h30: US personal income and spending (December)
 

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