In the loop
Shireen Darmalingam
What you should know this morning:
- The rand is stronger this morning, at R15.94/$, after closing marginally stronger yesterday (R15.96/$*).
- EM currencies were mixed yesterday; the COP (+0.9%), RUB (+0.8%) and BRL (+0.7%) were amongst the biggest gainers; the TRY (-3.4%), HUF (-0.6%) and THB (-0.4%) were amongst the biggest losers.
- Asian equity markets are mixed this morning; the Nikkei and Shanghai Composite are up, while the Hang Seng is down.
- The European Health Agency has noted the Omicron variant as spreading so fast that it might account for over half of cases in Europe in just months.
- An SA study indicates that the risk of reinfection from this variant is three times higher than any previous variants.
- The spread of the Omicron variant will likely see markets remaining volatile today.
- Several Fed policymakers are now calling for the wrapping up of asset purchases towards end Q1:22.
- Atlanta Fed President Raphael Bostic, San Francisco Fed President Mary Daly and Governor Randal Quarles agreed that it might be appropriate to bring forward rate increases.
- Treasury Secretary Janet Yellen noted the Fed’s job as having to avert a wage-price spiral; she concurs with the Fed’s reasoning to scale back asset purchases.
- US non-farm payrolls for November are due out today, as are the services PMIs for several countries.
- US employers likely added 550k jobs in November, from October's 531k.
- The unemployment rate is expected to have slipped to 4.5% in November, from 4.6%in October.
- A strong payrolls print today, together with an elevated US CPI reading for November, might cement policymakers’ decision to announce a faster tapering pace at the next FOMC meeting.
- Also, an interest rate hike might well be brought forward.
- China’s Caixin services PMI slipped in November, albeit remaining above the 50-pt benchmark.
- Japan’s official services PMI increased in November, remaining in expansion for a second month.
- OPEC+ is planning an oil supply hike, adding 400,000 barrels a day from January.
- This decision will be reviewed as the Omicron risk becomes clearer.
- Brent crude oil is up this morning, and up by 37% year-to-date.
- The gold price is up this morning, and down by 6.6% year-to-date.
- Brent crude oil is currently at $70.96/bbl; ($69.67/bbl*).
- Gold is at $1773/oz ($1763/oz*).
- SA CDS 230bps*, lower than Brazil 241bps* and Turkey 534bps*.
- Yields: US 10yr at 1.44%*, German bund at -0.369%* and SA 10-year generic at 10.06%*, SA’s R186 at 7.97%*.
* Denotes yesterday’s close.
Key events and data:
- 09h15: SA industry-wide PMI (November)
- 11h00: Eurozone Markit services and composite PMI (November)
- 11h30: UK Markit services and composite PMI (November)
- 12h00: Eurozone retail sales (October)
- 15h30: US non-farm payrolls, unemployment rate (November)
- 16h45: US ISM services and composite PMI (November)
- 17h00: US factory orders, durable orders (October)
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