Closing the loop

Market highlights:

• The rand is stronger, at R15.77/$ (R15.97/$*) today; it ranged between R15.73/$ and R15.97/$.
• The currency is above its 50-day, 100-day and 200-day moving averages (R15.20/$, R14.91/$ and R14.64/$ respectively).
• EM currencies were mixed today; the MXN (+1.3%), ZAR (+1.3%) and PLN (+1.1%) were amongst the biggest gainers; the MYR (-0.4%), IDR (-0.1%) and THB (-0.1%) were amongst the biggest losers.

• The OECD expects global growth at 5.6% (previously 5.7%) in 2021 before moderating to 4.5% in 2022 and 3.2% in 2023.
• US GDP growth was revised lower; GDP is expected at 5.6% in 2021, 3.7% in 2022 and 2.4% in 2023.
• Chinese economic growth was also revised down, to 8.1% in 2021, and 5.1% in 2022 and 2023.
• The outlook for the EU was upbeat; GDP is expected at 5.1% in 2021, 4.3% in 2022 and 2.5% in 2023.
• The organisation noted the main risks to the global economic outlook is the current surge in inflation that is proving more persistent than expected.
• Major central banks are now faced with decisions around tightening monetary policy earlier and more aggressively than previously anticipated.
• Inflation in the OECD is expected to peak close to 5% but should retreat to 3% by 2023.

• The US ADP private sector employment report saw private payrolls overshooting expectations increasing by 534k in November from 570k in October.
• The data suggests steady improvement after businesses struggled to fill job openings over the summer.
• The non-farm payrolls (NFP), due on Friday, is expected to have increased by 548k in November from 531k in October.

• Locally, the November BER manufacturing PMI overshot expectations increasing to a 5-month high 57.2 pts from 53.6 pts in October.
• The new sales orders sub-index increased to 54 pts from 48 pts in October on the back of improved local demand.
• Global supply chain constraints saw some consumers switch to domestically produced goods.
• The business activity sub-index improved as the impact of the 3-week strike in the steel industry subsided.
• The BER noted a ramp-up of activity and demand ahead of the December holiday season.
• The industry-wide PMI for November, due out on Friday, is also expected to have improved.

• Vehicles sales also overshot expectations in November increasing by 6.6% y/y from 6.1% y/y in October.
• 41,588 vehicles were sold in November; this compares with 39,015 sold in November 2020 and 41,041 vehicles sold in October 2021.
• 27,828 passenger cars were sold in November compared to 25,442 passenger cars sold in November 2020; 11,156 light commercial vehicles were sold down from 13,109 sold in November 2020.
• Vehicle exports were down by 42.2% y/y to 19,548 units in November, compared with 33,825 units in November 2020.
• For the year-to-date, exports are up by 8.3% y/y.
• Naamsa noted that despite the Covid-fuelled economic challenges, the new vehicle market continues to exhibit resilience.

• Electricity production and consumption data for November are scheduled for release tomorrow.

• The oil price is up by 1.3% today, and up by 37.9% in the year-to-date.
• The gold price is up by 0.7% today, and down by 5.9% in the year-to-date.

• Brent crude oil is at $71.47/bbl; ($70.57/bbl*).
• Gold price is at $1786/oz ($1774/oz*).

• SA CDS is at 241bps (244bps), lower than Brazil 256bps (258bps*) and Turkey 510bps (507bps*).
• Yields: US 10yr at 1.47% (1.44%*), German bund at -0.328% (-0.349%*) and SA 10-year generic at 10.16% (10.16%*), SA’s R186 is at 8.03% (8.03%*).
• The JSE ALSI is up by 0.8% today (+0.7%*).

* Denotes yesterday’s close.

 Key events and data:

• 07h00: Japan consumer confidence index (November)
• 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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