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In the loop 02 December 2021

In the loop

Shireen Darmalingam

What you should know this morning:

  • The rand is weaker this morning, at R16.01/$, after closing stronger yesterday (R15.97/$*).
  • EM currencies were mixed yesterday; the TRY (+1.4%), PLN (+0.9%) and KRW (+0.8%) were amongst the biggest gainers; the CLP (-1.1%), BRL (-1.0%) and MYR (-0.4%) were amongst the biggest losers.
  • Asian equity markets are mixed this morning; the Nikkei is down, while the Hang Seng and Shanghai Composite are up.
  • The WHO said that current vaccines would likely protect against severe cases of the Omicron variant.
  • The WHO expects more data on this variant’s transmissibility in the coming days.
  • US infectious disease specialist Anthony Fauci has said that the US’s restrictions on travel from southern Africa due to the Omicron variant would likely be temporary.
  • Covid cases almost doubled in SA yesterday.
  • The NICD has noted that the Omicron variant was found in 74% of the 249 Covid samples that were gene-sequenced in November.
  • The Delta variant accounted for 22%, from 79% in October.
  • The Fed’s Beige Book highlighted that bottlenecks and labour shortages in the US economy are holding back the recovery.
  • It reiterated that the US economy grew at a modest to moderate pace in October.
  • The Fed also said that prices increased at a moderate to robust pace, with price hikes widespread across sectors.
  • Strong demand allowed firms to raise prices with little resistance.
  • The report painted a mixed picture of the real estate sector; while relatively strong, some districts’ activity declined.
  • US Fed Chair Jerome Powell continues to stress that rising, and persistent, inflation poses a problem.
  • Powell said that the bank stands ready and "will continue to adapt" to keep rising prices in check.
  • ECB policymakers will likely delay a decision on post-pandemic bond purchases to the policy meeting in February 2022.
  • The emergence of Omicron has forced central banks to rethink the pace of tapering strategies and decisions around tightening monetary policy.
  • SA electricity production and consumption data releases for November are due out today.
  • Brent crude oil is up this morning, and up by 33.88% year-to-date.
  • The gold price is down this morning, and down by 6.4% year-to-date.
  • Brent crude oil is currently at $69.29/bbl; ($68.87/bbl*).
  • Gold is at $1777/oz ($1784/oz*).
  • SA CDS 235bps*, lower than Brazil 245bps* and Turkey 528bps*.
  • Yields: US 10yr at 1.40%*, German bund at -0.343%* and SA 10-year generic at 10.16%*, SA’s R186 at 8.04%*.

* Denotes yesterday’s close.

Key events and data: 

  • 12h00: Eurozone PPI (October), unemployment rate (October)
  • 13h00: SA electricity production and consumption (October)
  • 15h30: US initial jobless claims (27 November)

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