In the loop

What you should know this morning:

• The rand is unchanged this morning, at R18.34/$, after closing stronger yesterday (R18.34/$*).
• EM currencies were mixed yesterday; the PLN (+1.2%), ZAR (+1.2%) and HUF (+1.0%) were the biggest gainers; the TWD (-1.0%) and ARS (-0.1%) were the biggest losers.
• Asian equity markets the Nikkei, Hang Seng and Shanghai Composite are up.

• CPI in Japan registered in line with expectations, coming in at 4.0% y/y in January, from 3.6% y/y in December.
• CPI, excluding fresh food, was 3.2% y/y in January, from 3.0% y/y in December.
• This was the highest annual pace of inflation in 19 months.
• Today’s data supports the case for the BOJ to hike its benchmark interest rate further.
• Japan’s Jibun Bank manufacturing PMI increased in February, albeit remaining in contraction.
• The manufacturing PMI increased to 48.9 in February, from 48.7 in January; both the services and composite PMIs improved.

• Eurozone and UK flash PMI data releases for February are due out today and will provide an indication of how economic growth has been developing in Q1:25.
• The Eurozone PMI will be watched closely to see whether the January rebound has extended into the quarter.
• The UK composite PMI likely remained unchanged in February, while the manufacturing PMI likely improved.
• The UK GfK consumer confidence index improved to -20 in February, from -22 in January.
• UK retail sales are likely to have increased by 0.9% m/m in January, after having declined by 0.6% m/m in December.
• While many consumers are still feeling the pinch from the cost-of-living pressures, these pressures are starting to ease as wage growth continues to surpass inflation.

• Atlanta Fed President Raphael Bostic commented yesterday that he expects the Fed to lower interest rates twice more this year.
• He added, however, that uncertainty around this projection has risen.
• St. Louis Fed President Alberto Musalem has noted that monetary policy should remain “modestly restrictive” until it is clear that inflation is on track to reach 2%.
• He cited increased risks that progress may stall, or even reverse.

• US existing home sales, due out today, will likely have declined by 2.6% m/m in January, after having increased by 2.2% m/m in December.
• The University of Michigan sentiment (final estimate) index for February is also due out today.
• The sentiment index is likely to have remained unchanged from its previous estimate, at 67.8.
• The US flash PMI data for February is also scheduled for release; the manufacturing PMI is expected to have remained steady in February, while the services PMI is expected to have improved.

• Locally, it’s a quiet day as far as data releases are concerned.

• Brent crude is down this morning, and down by 2.4% year-to-date.
• The gold price is down this morning, and up by 11.5% year-to-date.

• Brent crude oil is currently at $76.42/bbl; ($76.48/bbl*).
• Gold is at $2927/oz ($2940/oz*).
• SA CDS 196bps*, Brazil 165bps* and Turkey 247bps*.
• Yields: US 10yr at 4.50%*, German bund at 2.53%*, SA 10-year generic at 10.60%*, SA’s R2035 at 10.60%*.

* Denotes yesterday’s close. 

Key events and data: 

• 09h00: UK retail sales (January)
• 11h00: Eurozone HCOB manufacturing, services and composite PMI (February)
• 11h30: UK S&P Global manufacturing, services and composite PMI (February)
• 16h45: US S&P Global manufacturing, services and composite PMI (February)
• 17h00: US University of Michigan sentiment, 1 yr and 5-10 yr inflation expectations (February – final), existing home sales (January)

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