In the loop 21 January 2026

In the loop

Shireen Darmalingam

What you should know this morning:

The rand is stronger this morning, at R16.39/$, after closing weaker yesterday (R16.42/$*).
EM currencies were mixed yesterday; the HUF (+0.9%), PLN (+0.7%) and RON (+0.7%) were the biggest gainers; the RUB (-0.5%), COP (-0.4%) and KRW (-0.3%) were the biggest losers.
Asian equity markets are mixed this morning; the Nikkei and Hang Seng are down, while the Shanghai Composite is up.

The World Economic Forum Annual Meeting: the Greenland dispute and possible US tariffs dominated discussions at Day 2 in Davos.
European leaders signalled they would respond firmly to any coercive measures.
EU Commission President Ursula von der Leyen reaffirmed the need to “unequivocally respect the sovereignty of Greenland and the Kingdom of Denmark” in talks with US lawmakers.
Talks were defined by calls for cooperation, warnings against economic nationalism, and concern about the shifting geopolitical order, all framed by the ongoing dispute over Greenland.

ECB President Christine Lagarde said that uncertainty has resurfaced following President Trump’s latest tariff threats, describing the situation as “a movie we’ve seen before”.
Lagarde stressed that the broader impact of heightened uncertainty matters more than the tariffs themselves.
She warned that any potential US action against European countries could undermine the ECB’s otherwise benign outlook for inflation and economic activity in the years ahead.

ECB Governing Council member Francois Villeroy de Galhau said that current transatlantic trade tensions are unlikely to have a significant impact on economic conditions within the region.
He noted that any new tariffs would have only a “muted” effect on prices, with limited direct inflationary pressure.
Villeroy emphasised that the central bank must remain nimble and responsive in an environment marked by elevated global uncertainty.
He added that the ECB stands ready to adjust its stance if trade developments were to lead to a more meaningful impact on the economy or a persistent deviation from the inflation target.

BOE Governor Andrew Bailey said yesterday that the central bank must remain highly vigilant amid rising tensions involving President Trump.
Bailey warned that Trump’s attempt to assert control over Greenland could carry significant geopolitical implications and pose risks to global financial stability.
He also noted that global financial markets have so far reacted “more mutedly” than expected to the President’s plans to impose tariffs on countries that oppose his actions.

The UK CPI report for December will likely reflect that inflation climbed in December.
CPI is expected to come in at 3.3% y/y in December, from 3.2% y/y in November.
Core CPI is likely to have increased to 3.3% y/y in December, from 3.2% y/y in November.
The UK house price index for November is also due out today.

Locally, the December CPI is due for release today and is expected to have increased to 3.6% y/y, from 3.5% y/y in November.
On a m/m basis, CPI is expected to have increased by 0.2%, after having declined by 0.1% in November.
Core CPI is projected at 3.4% y/y in December, from 3.2% m/m in November.
The November retail sales data may show sales growth of 2.7% y/y, down from a 2.9% y/y increase in October.

Brent crude oil is currently at $64.24/bbl; ($64.92/bbl*).
Gold is at $4870/oz ($4763/oz*).
SA CDS 140bps*, Brazil 137bps* and Turkey 219bps*.
Yields: US 10yr at 4.27%*, German bund at 2.85%*, SA 10-year generic at 8.55%*, SA’s R2035 at 8.42%*.

* Denotes yesterday’s close.

Key events and data:

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