In the loop

What you should know this morning:

• The rand is stronger this morning, at R17.45/$, after closing stronger yesterday (R17.49/$*).
• EM currencies were mixed yesterday; the CNY (+1.3%), KRW (+0.6%) and TWD (+0.5%) were the biggest gainers; the MXN (-1.9%), CLP (-1.4%) and COP (-1.3%) were the biggest losers.
• Asian equity markets are mixed this morning; the Nikkei is up, while the Hang Seng and Shanghai Composite are down.

• The US service sector expanded faster in November; the ISM services index increased to 56.5, from 54.4 in October.
• This improvement comes on the back of the holiday season bolstering business activity.
• The surge in business activity pushed the index to its highest level since Dec 2021.
• However, the prices paid sub-index slipped in November but remains elevated at 70, well above pre-pandemic levels, implying that inflation may take a while still to dissipate.
• Thirteen services industries improved in November, led by real estate, rental and leasing, mining, and agriculture, forestry, fishing and hunting.

• The RBA has raised its key rate by 25 bps, to 3.1%, and aims to keep tightening policy whilst taming inflation. 
• The RBA’s cumulative hikes since May amounts to 300 bps, marking the sharpest tightening in a year since 1989.
• The central bank further noted that it “expects to increase interest rates further over the period ahead, but it is not on a pre-set course”. 
• The bank is, however, expected to slow the pace of tightening in 2023.
• Governor Philip Lowe noted the timing and magnitude of rate hikes as being data-dependent.

• Locally, Q3:22 GDP is expected at 0.4% q/q (sa), after having contracted by 0.7% q/q (sa) in Q2:22. 
• GDP is expected at 2.8% y/y, following a 0.2% y/y increase in Q2:22.
• Eskom: Stage 2 loadshedding will continue until further notice. 

• The ANC’s NEC has indicated that it supports President Ramaphosa as remaining in office.
• Parliament has postponed the debate around the Phala Phala report to 13 December.
• Investors will be watching for new developments during this period of political uncertainty.

• Brent crude oil is down this morning, and up by 6.9% year-to-date.
• The gold price is up this morning, and down by 3.2% year-to-date.

• Brent crude oil is currently at $83.16/bbl; ($82.68/bbl*).
• Gold is at $1771/oz ($1769/oz*).
• SA CDS 258bps*, Brazil 239bps* and Turkey 511bps*.
• Yields: US 10yr at 3.58%*, German bund at 1.88%* and SA 10-year generic at 11.14%*, SA’s R186 at 9.00%*.

* Denotes yesterday’s close. 

 Key events and data: 

• 11h30: SA GDP (Q3:22)
• 15h30: US trade balance (October)

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