In the loop

What you should know this morning:

• The rand is stronger this morning, at R16.61/$, after closing weaker yesterday (R16.68/$*).
• EM currencies were largely down yesterday; the ZAR (-2.1%), CLP (-1.8%) and HUF (-1.4%) were the biggest losers; the INR gained 0.6%.
• Asian equity markets the Nikkei, Hang Seng and Shanghai Composite are up.

• Central bank watch: the minutes of the ECB's 4-5 February monetary policy meeting noted that all members supported the proposal by ECB Chief Economist Philip Lane to keep the three key policy rates unchanged. 
• Policymakers indicated that current monetary settings provide sufficient flexibility to respond to potential economic shocks arising from an increasingly volatile global environment. 
• With inflation close to the ECB's 2% target and the economy continuing to expand at a moderate pace, the ECB is not currently inclined to adjust borrowing costs. 
• However, the minutes also noted that risks are building.

• ECB Governing Council member Joachim Nagel commented that inflation remains a greater concern than economic growth as the ECB assesses the potential impact of the Middle East war. 
• He noted that the degree to which the Eurozone will be affected by higher energy prices and trade disruptions would largely depend on how long the conflict may persist. 
• Nagel emphasised that it is still too early to draw firm conclusions given the highly volatile situation. 
• He added that the ECB is likely to follow a similar approach to the one adopted after Russia's invasion of Ukraine, maintaining its commitment to preserving price stability.
• According to Nagel, the ECB is closely monitoring the surge in energy costs linked to the Iran conflict and will rely on updated projections to determine whether any policy action becomes necessary.

• Richmond Fed President Tom Barkin said yesterday that the Fed's response to the US-Israel war with Iran would depend largely on how long the conflict affects the US economy. 
• He noted that recent data and upcoming releases point to “a couple of months of relatively high inflation”. 
• He said that this “certainly puts pause to any conclusion that we're done fighting this”.
• Fed policymakers are scheduled to meet on 17-18 March and have indicated they are likely to keep interest rates unchanged as they wait for clearer evidence that inflation is moving sustainably lower.
• Barkin also said he is looking forward to working with Kevin Warsh, who has been nominated to lead the central bank. 
• He suggested he may be open to Warsh's proposal to shrink the Fed's balance sheet in order to create more room for potential interest rate reductions in the future.

• The US non-farm payrolls for February are due for release today; payrolls are expected to have increased by 55k, after having increased by 130k in January.
• The unemployment rate is likely to have remained unchanged, at 4.3%.
• Retail sales data are also scheduled for release; sales are expected have declined by 0.3% m/m in February, after stagnating in December.

• Locally, the SARB's gross and net reserves for February are scheduled for release today. 
• Gross reserves came in at $80.19bn in January, while net reserves came in at $74.88bn in January. 

• Brent crude is down this morning, and up by 38.9% year-to-date.
• The gold price is up this morning, and up by 18.8% year-to-date.

• Brent crude oil is currently at $84.61/bbl; ($85.41/bbl*).
• Gold is at $5128/oz ($5082/oz*).
• SA CDS 147bbps*, Brazil 128bps* and Turkey 238bps*.
• Yields: US 10yr at 4.13%*, German bund at 2.84%*, SA 10-year generic at 8.36%*, SA's R2035 at 8.22%*.

* Denotes yesterday's close.

Key events and data: 

• 08h00: SA gross and net reserves (February)
• 12h00: Eurozone GDP (Q4:25), employment (Q4:26)
• 15h30: US retail sales (January), non-farm payrolls (February), unemployment rate (February), average hourly earnings (February)

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