In the loop 07 December 2022

In the loop

Shireen Darmalingam

What you should know this morning:

The rand is stronger this morning, at R17.33/$, after closing stronger yesterday (R17.37/$*).
EM currencies were mixed yesterday; the CLP (+1.9%), BRL (+0.9%) and ZAR (+0.7%) were the biggest gainers; the KRW (-2.0%), INR (-0.9%) and IDR (-0.9%) were the biggest losers.
Asian equity markets are mixed this morning; the Nikkei and Shanghai Composite are down, while the Hang Seng is up.

The RBI has hiked the repo rate by 35 bps, to 6.25%; this after three consecutive 50 bps increases.
The bank noted that it is now near the end of its tightening cycle.
The governor noted that “inflation remains elevated and global factors continue to impart uncertainty”.
The bank further noted that inflation remains high and broad-based.

China’s trade balance compressed by more than expected in November due to disruptions from COVID-related lockdowns.
The trade balance, at $69.84bn, is now at its lowest level since the height of China’s countrywide lockdown in May.
Both exports and imports fell sharply in November.
Demand has been hit by the China’s “zero-COVID” policy which has repeatedly shut down large sections of cities to contain viral outbreaks.

Australia’s GDP softened to 0.6% q/q in Q3:22, from 0.9% q/q in Q2:22.
Consumer spending was the key driver of growth in Q3:22; growth was also supported by a recovery in travel following the reopening of the international border.
Expectations however are for a bigger hit to growth in the coming quarters as demand has yet to fully respond to the spate of interest rate increases since May.
The RBA has hiked rates by a cumulative 300 bps so far this year.
These hikes are expected to weigh on household spending in Q4:22 and into 2023.
The RBA hiked rates by 25 bps yesterday, and signalled further rate hikes to fight inflation.

Eurozone Q3:22 GDP (final estimate) is due out today; it is expected at 0.2% q/q, from 0.8% q/q in Q2:22.

Locally, the SARB’s gross and net reserves for November are due out today.
Gross reserves are expected to have increased to $59.16bn in November, from $58.70bn in October; net reserves are expected to have increased to $52.90bn in November, from $52.19bn in October.
Eskom will be running Stage 4 loadshedding as of 9am today until further notice.
This after further breakdowns and delays in returning generating units to service.

Brent crude oil is currently at $79.62/bbl; ($79.35/bbl*).
Gold is at $1773/oz ($1771/oz*).
SA CDS 272bps*, Brazil 247bps* and Turkey 531bps*.
Yields: US 10yr at 3.54%*, German bund at 1.80%* and SA 10-year generic at 11.16%*, SA’s R186 at 9.00%*.

* Denotes yesterday’s close.

Key events and data:

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