In the loop

What you should know this morning:

• The rand is weaker this morning, at R19.15/$, after closing weaker on Friday (R19.10/$*).
• EM currencies were mixed on Friday; the RUB (+0.8%), PHP (+0.2%) and THB (+0.1%) were the biggest gainers; the BRL (-1.2%), MXN (-1.0%) and ZAR (-0.9%) were the biggest losers.
• Asian equity markets the Nikkei, Hang Seng and Shanghai Composite are down.

• Central bank watch: Bank Indonesia is likely to hold its key rate at 6.00% on Wednesday.
• The National Bank of Poland will likely keep its benchmark interest rate at 5.75% on Thursday.
• The Bank of Korea is likely to cut its main interest rate by 25 bps, to 2.75%, on Thursday.

• China’s GDP, activity and credit data will be in the spotlight this week. 
• India’s CPI and trade balance for December are also due this week.

• UK CPI for December, due on Wednesday, is expected to come in at 2.6% y/y, the same as in November.
• On a m/m basis, CPI is likely to have increased by 0.4% in December, following a 0.1% increase in November.
• UK GDP data for November is due out on Thursday and will likely show that this economy has gathered pace.
• Investors will keep an eye on the ECB’s December monetary policy meeting minutes on Thursday.
• Following the December policy meeting, policymakers suggested that more easing was likely.
• Eurozone industrial production for November is due this week (Wednesday); production is likely to have continued to struggle, with little sign of any improvement.
• The Eurozone CPI for December (final estimate) is due out on Friday.
• Headline CPI is likely to come in at 2.4% y/y in October, from 2.2% y/y in November.
• A large part of the increase came from fuel price base effects.

• The US December CPI will be in focus this week (Wednesday) and is likely to come in higher, at 2.9% y/y, from 2.7% y/y in November.
• On a m/m basis, headline CPI is likely to have increased by 0.3% in December, the same as in November.
• Core CPI is expected at 3.3% y/y in December, also unchanged from November.
• This is expected as an uptick in price gains of other goods and services likely offset continued improvement in housing-rents inflation in December.
• The NFIB small business optimism index for December, due out tomorrow, is likely to have slipped slightly, to 101.5, from 101.7 in November.
• Headline producer price growth likely accelerated to 3.5% y/y in December, from 3.0% y/y in November.
• The Empire manufacturing survey for January is due out on Wednesday; consumer sentiment likely increased in January.
• The Fed’s Beige Book is also scheduled for release on Wednesday.
• The US NAHB housing market index for January is due for release on Thursday; sentiment likely slipped in January.
• Housing starts and building permits for December are due out on Friday.
• Housing starts are expected to have increased in December, while building permits are expected to have slipped.

• Locally, it’s a relatively quiet week, with only the release of Stats SA’s electricity production and consumption data for November.

• Brent crude is up this morning, and up by 8.7% year-to-date.
• The gold price is down this morning, and up by 2.3% year-to-date.

• Brent crude oil is currently at $81.13/bbl; ($79.76/bbl*).
• Gold is at $2684/oz ($2689/oz*).
• SA CDS 198bps*, Brazil 198bps* and Turkey 270bps*.
• Yields: US 10yr at 4.75%*, German bund at 2.59%*, SA 10-year generic at 10.58%*, SA’s R2035 at 10.61%*.

* Denotes Friday’s close. 

Key events and data:

• 21h00: US Federal Budget balance (December)

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