In the loop 30 November 2021

In the loop

Shireen Darmalingam

What you should know this morning:

The rand is weaker this morning, at R16.18/$, after closing stronger yesterday (R16.15/$*).
EM currencies were mixed yesterday; the RUB (+1.4%), MXN (+1.2%) and ZAR (+0.8%) were amongst the biggest gainers; the TRY (-3.7%), CLP (-1.3%) and BGN (-0.6%) 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 WHO has warned that the Omicron variant could fuel an increase in infections, which could have severe consequences.
Hong Kong has joined several countries in expanding travel restrictions as the Omicron variant spreads.
India too has tightened travel restrictions.
Germany is under pressure to introduce new curbs as infections climb there.
Pfizer will know within two to three weeks how well its current vaccine holds up against the Omicron variant.
Asian vaccine manufacturers are exploring the development of new vaccines to protect against Omicron.

China’s official manufacturing PMI rose above the 50-benchmark line, to 50.1 pts in November, from 49.2 pts in October.
China's factory activity improved as the impact of a power crunch subsided and an increase in workdays helped to boost output.
Inflationary pressures also eased in November.
The non-manufacturing PMI fell slightly to 52.3 pts in November, from 52.4 pts in October.
This index measures activity in the construction and services sectors.
China’s economy remains undermined by a housing market crisis and frequent Covid outbreaks, which could weigh on the growth outlook for next year.

Fed Chair Jerome Powell noted in his prepared remarks for the Senate that the emergence of the Omicron variant threatens the Fed's mandate.
Powell noted that rising infections "pose downside risks to employment and economic activity and increased uncertainty for inflation”.
Powell continues to expect inflation to recede over the next year.
He noted, however, that the new Covid strain now could see prices continue to rise for longer.
Powell did not discuss the possibility of altering the tapering process.
The Fed has begun reducing its support for the US economy this month; the tapering process is expected to end by June 2022.

SA private sector credit extension for October is expected to have increased by 1.75% y/y, from September’s increase of 1.6% y/y.
The trade balance is expected at R20bn in October, from R22bn in September.
Stats SA will release Q3:21 labour data today.

Brent crude oil is currently at $72.65/bbl; ($73.44/bbl*).
Gold is at $1793/oz ($1784/oz*).
SA CDS 242bps*, lower than Brazil 261bps* and Turkey 504bps*.
Yields: US 10yr at 1.49%*, German bund at -0.317%* and SA 10-year generic at 10.23%*, SA’s R186 at 8.10%*.

* Denotes yesterday’s close.

Key events and data:

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