In the loop 04 December 2024

In the loop

Shireen Darmalingam

What you should know this morning:

The rand is weaker this morning, at R18.10/$, after closing stronger yesterday (R18.09/$*).
EM currencies were mixed yesterday; the CZK (+0.6%), CLP (+0.6%) and PEN (+0.5%) were the biggest gainers; the KRW (-1.7%), IDR (-0.3%) and MYR (-0.2%) were the biggest losers.
Asian equity markets the Nikkei, Hang Seng and Shanghai Composite are up.

Central bank watch: the National Bank of Poland is expected to pause again since the last cut in October 2023.
The central bank is likely to keep its policy rate on hold, at 5.75%, today.

China’s Caixin composite PMI increased to 52.3 in November, from 51.9 in October.
The services PMI fell to 51.5 in November, from 52.0 in October.
The data implies still sluggish activity despite the recent stimulus push.

ECB Governing Council member Robert Holzmann cnommented that any cut in interest rates at next week’s monetary policy decision would likely be “moderate”.
He added that inflation developments have moved in the right direction; however, there “have been in recent times deviations to the upside”.
Holzmann noted that the geopolitical environment indicates price increases are more likely rather than unlikely.
The ECB will enter a quiet period soon ahead of the 11-12 December policy meeting.

San Francisco Fed President Mary Daly noted yesterday a rate cut later this month as not guaranteed; however, it remains on the table.
She noted that “in order to keep the economy in a good place we have to continue to recalibrate policy”.
She added that policymakers would debate at the upcoming FOMC meeting whether this would be in December, or at a later stage.
Daly’s comments match several other policymakers who expect the US central bank to continue cutting interest rates.

The US Job Openings and Labour Turnover Survey (JOLTS) job openings came in lower than expected in October.
Job openings increased to 7,744k in October (against expectations for an increase to 7,519k), from a downwardly revised 7,372k in September.
The private sector ADP employment report, the precursor to the non-farm payrolls report, is likely to have increased by 150k in October, following a 233k increase in September.
Investors will also keep an eye on the non-farm payrolls (NFP) for November, due out on Friday.
NFP are expected to have increased, by 218k, following an increase of 12k in October.
The unemployment rate is likely to have remained unchanged, at 4.1%, in November.
The ISM services index likely slipped to 55.7, from 56.0 in October.
The Fed’s Beige Book will likely highlight a post-election surge in consumer and business sentiment.

Locally, the industry-wide PMI for November is due out today; the index is currently above the 50pt benchmark, at 50.6.
The BER will release the Q3:24 consumer confidence data; the index improved to -5 in Q2:24.

Brent crude oil is currently at $73.82/bbl; ($73.62/bbl*).
Gold is at $2649/oz ($2647/oz*).
SA CDS 183bps*, Brazil 173bps* and Turkey 255bps*.
Yields: US 10yr at 4.22%*, German bund at 2.05%*, SA 10-year generic at 10.11%*, SA’s R2035 at 10.16%*.

* Denotes yesterday’s close.

Key events and data:

09h15: SA S&P Global industry-wide PMI (November)
10h00: SA BER consumer confidence (Q4:24)
11h00: Eurozone S&P Global services and composite PMI (November – final), OECD publishes economic outlook
11h30: UK S&P Global services and composite PMI (November – final)
12h00: Eurozone PPI (October)
14h00: US MBA mortgage applications (29 November)
15h15: US ADP employment report (November)
16h45: US S&P Global services and composite PMI (November – final)
17h00: US ISM services (November), factory orders (October), durable goods orders (October – final)
21h00: US Fed Beige Book

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