In the loop 08 January 2025

In the loop

Christelle Grobler

What you should know this morning:

The rand is weaker at R18.72/$ this morning, after closing weaker yesterday (R18.69/$*).
EM currencies were mixed yesterday; the CLP (+0.7%), KRW (+0.6%) and MYR (+0.5%) gained the most; the ZAR (-0.5%), PLN (-0.4%) and PEN (-0.4%) lost the most.
Asian equity markets, the Nikkei, Hang Seng and Shanghai Composite, are down.

The US ISM services index came in stronger than expected for December.
The index jumped to 54.1, from 52.1 in November; readings above 50 indicate expansion.
Demand remained resilient in December, with stronger growth in orders and a pickup in business activity.
The measure for prices paid for materials and services shot up 6 points in December, to 64.4 – the highest level since 2023.
With fears that inflation might remain more stubborn than expected, the acceleration in this cost gauge adds to the uncertain inflation outlook which has been clouded by the threat of import tariff hikes.
Fed policymakers have been advocating a cautious approach to further interest rate cuts.
The FOMC meeting minutes for 18 December will be released tonight.

US JOLTS job openings surprised to the upside in November.
Job openings increased 259k to 8.1 million in November from an upwardly revised 7.8 million in October.
The largest rises in vacancies were for higher-skill jobs in the financial, professional and business services as well as education and health services.
Openings mostly declined in the more cyclically sensitive sectors such as durable goods manufacturing, and the food and accommodation sector.
Today sees the release of the ADP employment trends for December.
ADP employment data is likely to show a smaller rise in employment of 139k, compared to 146k in November.
Initial jobless claims data for the week of 4 January is also due out later today.

Japan’s consumer confidence index dipped lower in December; it declined to 36.2 from 36.4 in November.
Consumer confidence reached a post-pandemic peak (at 39.5) in March 2024.
The employment and income growth sub-indices are currently boosting the overall confidence index, while the willingness to buy durable goods is fairly weak.

Locally, the SARB releases gross and net reserves for December this morning.
Gross reserves stood at $65.86 billion at the end of November, with net reserves at $60.62 billion.
The Absa manufacturing PMI for December is also due out today; recent readings have been volatile.
In November, the manufacturing PMI dipped below the neutral 50-mark, to 48.1, from 52.6 in October.

Brent crude oil is currently at $77.39/bbl; ($77.05/bbl*).
Gold is at $2649/oz ($2653/oz*).
SA CDS 194bps*, Brazil 191bps* and Turkey 265bps*.
Yields: US 10yr at 4.69%*, German bund at 2.48%*, SA 10-year generic at 10.29%*, SA’s R2035 at 10.32%*.

* Denotes yesterday’s close.

Key events and data:

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