In the loop 25 February 2026

In the loop

Shireen Darmalingam

What you should know this morning:

The rand is stronger this morning, at R15.92/$, after closing stronger yesterday (R15.93/$*).
EM currencies were mixed yesterday; the RUB (+0.7%), MXN (+0.6%) and CLP (+0.6%) were the biggest gainers; the ARS (-0.8%), COP (-0.5%) and PHP (-0.3%) were the biggest losers.
Asian equity markets the Nikkei, Hang Seng and Shanghai Composite are up.

Central bank watch: The Bank of Thailand is anticipated to leave its benchmark rate unchanged, at 1.25%, today.

The final estimate of the January Eurozone CPI, due out today, will offer further clarity on the drivers behind the recent moderation in services inflation.
CPI is expected at 1.7% y/y in January, from 2.0% y/y in December.
The decline may partly reflect seasonal repricing effects that typically occur at the start of the year.
On a m/m basis, CPI is expected to have decreased by 0.5% in January, following a 0.2% m/m increase in December.

BOE Governor Andrew Bailey said in his annual report that he expects interest rates to be cut, as inflation remains “on track” to return to the Bank's 2% target.
However, he stopped short of providing explicit guidance on the timing of any reductions.
He also noted that the UK economy has proven more resilient than previously anticipated.
Chief Economist Huw Pill emphasised that the BOE should act symmetrically in its policy approach.
He argued that if policymakers are prepared to look through a temporary inflation peak in 2025, they should likewise look through the trough expected in spring 2026.
While he continues to favour a cautious pace of further rate cuts, he said he takes comfort from the medium-term inflation outlook.
Policymaker Megan Greene added that it is appropriate to slow the pace of additional easing until there is greater confidence that inflation is returning sustainably to target.

President Trump, in his State of the Union address, focused on the economy, trade and national security as he sought to rally support ahead of the November midterm elections.
Trump portrayed the US economy as strong, claiming that inflation, mortgage rates and energy prices are falling, while investment, factory construction and job creation are accelerating.
He largely avoided acknowledging continued cost?of?living pressures faced by households.
He defended his trade agenda in the wake of a US Supreme Court ruling that struck down key elements of his tariff policy, signalling continued efforts to pursue tariffs through alternative legal authorities.

The US Conference Board reported that consumer confidence rose in February, supported by improved expectations for the economy, labour market, and personal income.
The headline index increased to 91.2 in February, up from an upwardly revised 89.0 in January.
The expectations index, which measures consumers' outlook for the next six months, recorded its largest gain since July, increasing to 72.0 in February, from 67.2 in January.
The present situation index, which reflects consumers' assessment of current business and labour market conditions, edged lower, to 120.0 in February, from 121.8 in January.
The improvement in overall sentiment follows recent data suggesting signs of stabilisation in the labour market.
However, consumers remain broadly cautious regarding their job prospects.

Locally, Finance Minister Enoch Godongwana is scheduled to table Budget 2026 in Parliament today.
The Budget is expected to reaffirm government's commitment to fiscal consolidation, including the objective of the debt?to?GDP ratio peaking in FY25/26.
While a material revenue overshoot is likely, largely underpinned by stronger commodity prices, we expect National Treasury's forecasts, particularly beyond FY25/26, to remain prudently conservative.
Revenues are likely to exceed the Medium?Term Budget Policy Statement (MTBPS) projections by around R10-15bn in FY25/26, with such overperformance expected to persist in subsequent years.
Expenditure is anticipated to remain broadly on track.
Moderate debt?servicing cost savings could emerge from lower interest rates, while key fiscal ratios may also benefit from a slightly higher nominal GDP denominator over the medium term.

Brent crude oil is currently at $71.22/bbl; ($70.77/bbl*).
Gold is at $5194/oz ($5143/oz*).
SA CDS 140bbps*, Brazil 127bps* and Turkey 227bps*.
Yields: US 10yr at 4.02%*, German bund at 2.70%*, SA 10-year generic at 8.05%*, SA's R2035 at 7.92%*.

* Denotes yesterday's close.

Key events and data:

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