-Battered rand: The South African rand briefly broke through 16 per dollar this morning as fallout from President Jacob Zuma’s abrupt firing of his finance minister continues. Yields on benchmark government bonds due Dec. 2026 climbed to 10.6 percent and the South African bank share index has seen $11 billion wiped off its value in the last two days. We’re seeing selling elsewhere in emerging market currencies today, including Turkey, Brazil, and Russia, where the ruble is at its lowest level since august.
-Oil slumps: Brent declined to $39 a barrel, its lowest level since Dec. 31 2008, in London trading while West Texas Intermediate for January delivery was at $36.25 a barrel on the New York Mercantile Exchange. The price falls come after the International Energy Agency said in a report this morning that the global oil surplus will persist until at least late 2016. West Texas Intermediate is down around 11 percent in just the last month.
-Yuan slips: The Chinese yuan recorded its biggest weekly drop since August’s surprise devaluation dropping 0.27 percent on Friday to close at 6.4553 per dollar. China’s central bank has lowered its daily yuan fixing on seven of nine trading days since winning reserve-currency status at the International Monetary Fund on Nov. 30. The falling yuan has helped push the yield advantage of China’s sovereign debt over U.S. Treasuries to the narrowest in five years, leaving investors with fewer reasons to buy Chinese debt just as that country’s bond market opens wider. As the Federal Reserve prepares to hike interest rates and the dollar continues its uptrend, the link between the yuan and the dollar is seen as increasingly inappropriate.
-Coming up: It’s only five sleeps until Fed decision day, so every U.S. data point will be very closely watched for anything that might derail the rate hike consensus, and today there will be plenty of data points on offer. At 8:30 a.m. ET U.S. retail sales data for November are released, with producer prices due at the same time. Economists are looking for a jump of 0.4 percent in retail sales excluding auto and gas spending. At 10:00 a.m. the latest University of Michigan Consumer Sentiment Index comes out, with expectations for a small increase to 92 for December.
– Back in the red: U.S. stock futures are dipping Friday morning, indicating Wall Street may be set for its fourth negative trading day of the week. Thursday bucked the week’s downward trend: The Dow Jones industrial average jumped 0.5%, the S&P 500 eked out a 0.2% gain and the Nasdaq rose by 0.4%. But European markets are looking weak in morning trading, and most Asian markets ended in the red.
-Stocks to watch — Dow, DuPont, Ford, Adobe, DAVIDsTEA: Dow Chemical (DOW) and DuPont (DD) announced Friday that they are merging to create DowDuPont, a new industrial titan worth $130 billion. The move was widely expected and shares surged earlier in the week. Now the deal is confirmed, both are dipping premarket, with DuPont stock down by 5%. Ford (F) will be in the spotlight after the American automaker announced it was making a big push into electric vehicles, investing another $4.5 billion by 2020. The company said more than 40% its models will come in electrified versions by the end of the decade. Shares in Adobe (ADBE) look set to surge Friday after the company issued a better-than-expected earnings report. And investors are expected to warm to the specialty tea company, DAVIDsTEA (DTEA), after the young firm reported results that exceeded Wall Street expectations. The Canadian-based company reported double-digit sales growth in the third quarter, but made a small loss.
-Mystery in Hong Kong: Asian markets were led lower by a 1% fall in Hong Kong after another top Chinese executive was reported to have gone missing. Shares in two Hong Kong companies linked to a Chinese conglomerate were halted on Friday after its chairman was reported to be missing. Fosun International and Fosun Pharmaceutical said trading was suspended «pending the release of an announcement containing inside information.» Chinese business news site Caixin reported Thursday that Fosun Group had been unable to contact its chairman, Guo Guangchang. Several corporate executives and senior government officials have been vanishing lately, and some never return to their posts.