In the loop 26 March 2025

In the loop

Shireen Darmalingam

What you should know this morning:

The rand is weaker this morning, at R18.28/$, after closing unchanged yesterday (R18.24/$*).
EM currencies were mixed yesterday; the BRL (+1.1%), COP (+0.9%) and CLP (+0.7%) were the biggest gainers; the RUB (-0.8%), PHP (-0.5%) and IDR (-0.2%) were the biggest losers.
Asian equity markets the Nikkei, Hang Seng and Shanghai composite are up.

The US Conference Board consumer confidence index fell more than expected in March, to 92.9 (the lowest since early 2021), from an upwardly revised 100.1 in February.
Consumers expressed concern about higher prices and the economic outlook.
Sentiment was also impacted by uncertainty about President Donald Trump's policies.
The current conditions index slipped to 134.5 in March, from 138.1 in February.
The expectations index also fell in March, to 65.2, from 74.8 in February.

US new home sales increased less than expected in February, by 1.8% m/m (to 676k annualised), after decreasing by an upwardly revised 6.9% m/m in January (to 664k annualised).
Homebuilders benefited from better weather in February; sales incentives also boosted demand during the month.
Despite the improvement in February, homebuilders remain cautious due to increased home supply, high mortgage rates, and prices.
Building permits were down by 1.0% m/m in February, after having fallen by 1.2% m/m in January.

Fed Governor Adriana Kugler yesterday expressed her support for the Fed to hold interest rates steady for “some time”.
Kugler noted an increase in goods inflation in recent months.
She also noted that survey data from the University of Michigan has shown a pickup in both short-term and long-term inflation expectations.
Additionally, Kugler noted heightened economic uncertainty due to President Trump’s implementation of new tariffs on US trading partners and his threats to impose more.

ECB Governing Council member Francois Villeroy de Galhau noted that he still sees scope for further interest rate cuts in the region.
He added that the pace and extent of rate cuts are open decisions and would depend on incoming data.
He noted that his support for further rate cuts comes on the back of a “solid trend” of disinflation in the region.
He added that uncertainty from President Trump’s policies must also be considered, together with other factors including financial conditions and exchange rates.
The ECB has cut its benchmark interest rate six times since June last year.

UK CPI for February is scheduled for release today and looks set to have remained steady in February.
CPI is expected to come in at 3.0% y/y in February, the same as in January.
On a m/m basis, CPI is expected to have increased by 0.5% in February, after having fallen by 0.1% in January.
The BOE will likely keep an eye on services inflation.
Looking ahead, however, CPI is likely to increase further in the near term on the back of higher energy costs and increases in administered prices.

Brent crude oil is currently at $73.20/bbl; ($73.02/bbl*).
Gold is at $3015/oz ($3022/oz*).
SA CDS 212bps*, Brazil 180bps* and Turkey 300bps*.
Yields: US 10yr at 4.33%*, German bund at 2.79%*, SA 10-year generic at 10.70%*, SA’s R2035 at 10.69%*.

* Denotes yesterday’s close.

Key events and data:

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