In the loop

What you should know this morning:

• The rand is stronger this morning, at R17.12/$, after closing weaker yesterday (R17.16/$*).
• EM currencies were mixed yesterday; the THB (+0.8%), PLN (+0.4%) and KRW (+0.3%) were the biggest gainers; the HUF (-1.4%), RUB (-1.1%) and ZAR (-0.2%) were the biggest losers.
• Asian equity markets the Nikkei, Hang Seng and Shanghai Composite are up.

• China’s PPI fell again in November by 1.3% y/y, matching October’s decline.
• CPI moderated to 1.6% y/y in November, from an increase of 2% y/y in October.
• Core CPI, which excludes the volatile food and energy prices, was unchanged, at 0.6% y/y in November.
• Disruptions from Covid outbreaks and restrictions impacted manufacturing activity and reduced demand.
• China’s government is expected to do more to boost market and household confidence.
• The fast pace of reopening the economy signals the urgency of trying to boost this economy. 

• The US PPI data for November, due later today, is expected at 0.2% m/m, matching October.
• US CPI for November is due out next week; CPI is likely to have moderated to 8.0% y/y, from October’s 8.2% y/y increase.
• The FOMC will be meeting for the final time this year next week — and is largely expected to slow the pace of rate hikes to 50 bps.
• A hawkish dot plot is expected and will likely show that the hiking cycle still has a way to go though.

• The University of Michigan consumer sentiment index is expected to have increased, albeit marginally, to 57 in December, from 56.8 in November.
• Sentiment is likely to remain low (by historical standards) as the higher cost of living weighs on confidence.
• More than 40% of consumers (respondents to the survey) reported in November that their living standards had deteriorated due to high inflation.
• The BOE and ECB will be making their respective policy decisions next week. 

• Locally, it’s a quiet day as far as data releases are concerned.
• Eskom has implemented Stage 5 loadshedding.

• Oil prices have rebounded this morning, after having fallen to a 1 yr low this week. 
• This comes on the back of growing fears of a recession and rising interest rates eroding the outlook for crude demand. 
• Brent crude oil is up this morning, and down by 1.4% year-to-date.
• The gold price is unchanged this morning, and down by 1.8% year-to-date.

• Brent crude oil is currently at $76.73/bbl; ($76.15/bbl*).
• Gold is at $1796/oz ($1787/oz*).
• SA CDS 265bps*, Brazil 243bps* and Turkey 532bps*.
• Yields: US 10yr at 3.45%*, German bund at 1.82%* and SA 10-year generic at 11.00%*, SA’s R186 at 8.85%*.

* Denotes yesterday’s close. 

 Key events and data: 

• 15h30: US PPI (November)
• 17h00: US wholesale inventories (October – final)
• 17h00: US University of Michigan consumer sentiment index, 1 yr and 5-10 yr inflation expectations (December)

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