In the loop 24 January 2023

In the loop

Shireen Darmalingam

What you should know this morning:

The rand is stronger this morning, at R17.18/$, after closing weaker yesterday (R17.20/$*).
EM currencies were mixed yesterday; the COP (+0.9%), MXN (+0.3%) and CZK (+0.3%) were the biggest gainers; the PEN (-0.7%), HUF (-0.7%) and ARS (-0.5%) were the biggest losers.
Asian equity markets the Nikkei, Hang Seng and Shanghai Composite are up.

Eurozone consumer confidence improved in January but remained in negative territory.
The confidence index increased to -20.9 in January, from -22.2 in December.
The improvement to the highest level since February 2022 signals some resilience as the region tries to avoid a recession this year.
Nonetheless, consumer sentiment remains low by historical standards and below the long-term average.
Consumers are still particularly concerned about inflation continuing to erode purchasing power.
However, recent gains add to evidence that this regional economy is performing better than expected despite the energy-price shock.

The US leading index slid by 1% in December, after a 1.1% slippage in November.
The biggest positive contributor to the leading index was orders for non-defence capital goods.
The coincident index, which measures current conditions, rose 0.1% in December, following no change in November.

Pakistan’s central bank raised its key rate by 100 bps, to 17%, the highest in over 24 years.
The increase comes as this economy grapples with rising inflation, supply shortages, and stalled foreign financing.
The government has an economic growth estimate of 2% for this year; the risks here, however, are to the downside.

Japan’s Jibun Bank composite PMI increased to 50.8 in January, from 49.7 in December.
Both the manufacturing and services PMI improved in January.
PMI data for several countries, due out today, is likely to exhibit a mixed picture.
The Eurozone composite PMI for January is expected to have edged up, to 49.8, from 49.3 in December.
Falling energy costs have boosted prospects for consumers and factories.
The UK manufacturing gauge is seen rising to 48.5 in January, while the composite PMI is expected to slip to 48.8.
The US manufacturing PMI is expected to have increased in January, while the services component likely slipped further in January.

Locally, the SARB’s leading indicator for December is scheduled for release today; the index slipped to 123 in November, from 124.1 in December.
Eskom: loadshedding has been downgraded to Stage 3; Stage 4 loadshedding will commence at 4pm until 5am tomorrow.

Brent crude oil is currently at $88.05/bbl; ($88.19/bbl*).
Gold is at $1934/oz ($1923/oz*).
SA CDS 254bps*, Brazil 244bps* and Turkey 551bps*.
Yields: US 10yr at 3.50%*, German bund at 2.20%* and SA 10-year generic at 10.51%*, SA’s R186 at 8.25%*.

* Denotes yesterday’s close.

Key events and data:

Read PDF