In the loop 13 January 2026

In the loop

Shireen Darmalingam

What you should know this morning:

The rand is weaker this morning, at R16.40/$, after closing stronger yesterday (R16.39/$*).
EM currencies were mixed yesterday; the CLP (+1.1%), RUB (+0.9%) and THB (+0.6%) were the biggest gainers; the KRW (-0.6%), IDR (-0.2%) and BRL (-0.2%) were the biggest losers.
Asian equity markets are mixed this morning; the Nikkei and Hang Seng are up, while the Shanghai Composite is down.

ECB Governing Council member Francois Villeroy de Galhau has said that the ECB would be unlikely to raise interest rates this year unless the economy is hit by unexpected shocks.
He argued that the ECB has “won the battle” against inflation, with headline inflation at 2% and underlying price pressures easing.
He noted that policymakers would remain pragmatic and agile.
Villeroy also voiced support for US Fed Chair Jerome Powell, describing him as “a model of integrity and commitment to the public interest”.
This follows Powell’s claim that the Trump administration is using the threat of criminal prosecution to press the Fed into cutting interest rates.

The Trump administration’s latest attack on Powell has reignited concerns over central bank independence and weighed on investor sentiment.
Powell’s recent remarks were his most direct acknowledgment yet of intensifying political pressure on the Fed to ease policy.
In response, several former Fed chairs issued a statement condemning what they called an “unprecedented attempt to use prosecutorial attacks to undermine [Fed] independence”.
President Trump has repeatedly demanded the Fed cut rates aggressively, calling for at least 2 percentage points of rate cuts over the past year.
The Fed delivered a cumulative 75 bps of cuts in 2025, citing persistent inflation pressures and uncertainty stemming from Trump’s trade policies.
Powell’s term as Fed chair expires in May, and Trump said last week that he is close to naming Powell’s successor.

New York Fed President John Williams said interest rates are “well positioned” to help stabilise the labour market while bringing inflation back to the Fed’s 2% target.
He noted that risks to the Fed’s mandate are now in “better balance” following the Fed’s 75 bps rate cuts last year.
Williams said he expects the unemployment rate to stabilise this year before gradually declining over the next few years, with broader labour market indicators having returned to pre-pandemic norms.
He also emphasised that the Fed’s independence from political interference has delivered “huge dividends,” particularly in helping to keep inflation in check.

The US December CPI report will be in the spotlight today.
Headline inflation is expected to have held steady at 2.7% y/y in December, unchanged from November, while core CPI is expected to have edged up to 2.7% y/y, from 2.6% y/y.
The NFIB small business optimism index for December is also due out today.
The index likely rose to 99.2 in December, from 99.0 in November.
New homes sales for October are expected to have declined by 10.6% m/m, to 715k.

Brent crude oil is currently at $64.07/bbl; ($63.87/bbl*).
Gold is at $4590/oz ($4616/oz*).
SA CDS 135bps*, Brazil 137bps* and Turkey 217bps*.
Yields: US 10yr at 4.17%*, German bund at 2.84%*, SA 10-year generic at 8.42%*, SA’s R2035 at 8.28%*.

* Denotes yesterday’s close.

Key events and data:

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