South African Rand
There was plenty of economic data for
South
Africa in the overnight supporting a mixed
session following a better than expected US gross domestic product report. Subsequent to yesterday’s positive
growth figures, consumer prices in the economy rose in line with earlier
expectations of 5.4 percent in the year on year. The core rate, however, was slightly
lower, advancing by 3.3 percent compared to consensus figures that pitted prices
to come in higher at 3.6 percent.
Although slightly lower, the rate continues to hover at the top end of
the central bank’s inflationary target range, increasing speculation of an
imminent short term rate hike in December.
The notion is widely rand bullish and is likely to be coupled with
further strength in gold prices as we head into year end. Subsequently, the BER business
confidence survey continues to show underlying positive sentiment and growth
prospects on the corporate side of things.
Although edging lower for the fourth quarter, manufacturers continue to
remain upbeat of future consumption patterns despite continuing sentiment of
rising interest rates. Compiled by
the Rand Merchant Bank and the Bureau of Economic Research, survey results
dipped to print 83 for the quarter, two points lower than the previous 85. Bullish, the report is a clear
indication of the strength of the recent spate of consumer spending supportive
of the growing economy.
Subsequently, shares gained in the overnight as commodities based
producers led the charge.
Advancing, shares were led higher by BHP Billiton and Anglo
Platinum. Anglo Platinum Ltd. stock was supported following
statements by officials that annual profit is likely to have tripled on higher
commodity prices. In the same
fashion, BHP, Australia’s biggest oil and gas
producer gained 0.7 percent on the day after crude oil continued to advance
higher. January front month
contracts were higher, advancing to $61.53 on momentum from yesterday’s bid
tone. As a result, the FTSE/JSE
Africa All Share Index added 130.07 points to close at 23,
694.43.
Mexican
Peso
The peso gained on the day despite
mounting tension in recent days surrounding the upcoming inauguration of
President elect Felipe Calderon.
Violence in Oaxaca is only an example as further political
disruptions are sure to mount as we head towards Friday’s ceremonies. The situation has grown so worrisome
that the speaker of Mexico’s lower house has personally
asked for security to ensure the safety of Calderon following a scuffle with
legislatures over the actual ceremony platform location. Plenty of opposition has mounted in
recent days as members of the Party of the Democratic Revolution have vowed to
prevent a swearing in. Nonetheless,
the Peso continued to rebound finding near term support at the 11.0000
handle. Lending a positive bias to
the day’s gains were equity stocks, rising almost 1.5 percent on the day. Trading at 24,720.91, the Bolsa
benchmark index added 375.96 points and reversed the decline seen over the past
two days. Subsequently expected for
tomorrow will be the Mexican public balance report. Anticipated, the results of the survey
are expected to be overshadowed, as well as the rest of the week, by the
aforementioned inauguration.
Subsequently, bids are being taken on a boost higher in crude oil
contracts with the economy benefiting from higher prices.
Nordics – Swedish,
Norway and Denmark
In similar fashion, Norwegian retail
sales moved higher in tandem with yesterday’s advancing Swedish retail sales
figures. In the month of October,
sales jumped by 8.3 percent, the fastest pace since 1998. The figures aren’t surprising given the
fact that the labor market remains tight amid rising growth prospects for the
economy, boosting wages. Spurred on
by 10 consecutive quarters of growth, the labor market continues to remain tight
as unemployment remains at an 18-year low.
However, the expansion has led inflationary pressures higher to a 2.7
percent pace, the highest since the beginning of the year. All factors considered, the speculation
is likely to continue siding with another round of rate hikes when central
bankers meet at year end, lending to a bullish bias for the underlying currency
pair. Matching sentiment in the
other two Nordic economies, the report has led the currencies higher in
conjunction with crude oil’s advance on the day. Taking a look ahead, tomorrow’s action
should be a continuous repeat of today’s momentum, should reports continue to
purport a move higher in benchmark rates.
Tomorrow, Norwegian unemployment is expected to support today’s retail
sales figures, with the consensus expecting another incremental decline to 2.1
percent in the unemployment rate.
Likely complimenting the unemployment data will be the gross domestic
product report for Denmark. Rising on an annualized 3 percent basis,
the report reflects a consensus that remains a firm believer in the near term
expansion in the region.
Hong
Kong
Dollar
Continuing an impressive streak of
six straight advancing sessions, the Hong Kong
dollar seems to be making headway against its US dollar counterpart. The sentiment has been boosted ahead of
tomorrow’s money supply report which is expected to continually show supported
monetary inflation. Already
previously posting a 16.3 percent growth in the month of October, on the
annualized comparison, the consensus is expecting the continued inflationary
environment to keep officials on their toes, maintaining a hawkish eye on the
current situation. However, with
overall consumer prices still tamed, any restrictive or tightening measures may
not be readily forthcoming. Focus
is also likely to be placed on the Brunswick PMI figure. Posting a 54.4 reading for the month of
September, consensus is expecting a likely follow through on the positive growth
result as domestic and foreign demand remain healthy. Retail sales figures will subsequently
be released the following with expectations of another monthly increase looming
heavy. Both reports are likely to
add to the current strength obtained by the Asian currency, potentially lending
to a strong finish below the 7.7750 figure for the emerging currency pair. Subsequently, a rebound in stock markets
helped to support the currency.
Following a widely disappointing plunge yesterday, the most since the
September 11th attacks, the Hang Seng index reversed and gained
slightly as traders began to pickup the pieces. Led by Esprit and developer stocks the
benchmark index rose 141.40 points to close at 18,780.93.
Singapore Dollar
The Singapore dollar
crashed through resistance barriers breaking nine year highs at the 1.5500
figure. Rising formidably in the
overnight, the move was bolstered by a reversal move in the equity markets, and
ahead of the October money supply reports.
Expected to continue the uptrend that has been visible over the past few
months, the inflationary suggestion is likely to support the currently hawkish
view by the Monetary Authority of Singapore, lending to further bullishness on
the underlying currency.
Subsequently, the Straits Times Index rebounded following yesterday’s
plunge. Led by developer and real
estate companies, the benchmark index added 38.55 points to close at 2,826.36 in
the overnight. Notably,
Marine Fuel Supplier Chemoil Energy, which abandoned earlier plans to list
shares in the region, priced a revised IPO at the lower end of estimates. Although now not the second largest IPO
planned in the region, the event still does offer some optimism that further
transactions may be to follow. The
likelihood would bolster further momentum in the equity
arena.
