In the loop

What you should know this morning:

• The rand is stronger this morning, at R18.96/$, after closing weaker yesterday (R18.97/$*).
• EM currencies were mixed yesterday; the PLN (+0.5%), RUB (+0.3%) and COP (+0.2%) were the biggest gainers; the CLP (-1.2%), CZK (-1.0%) and THB (-0.6%) were the biggest losers.
• Asian equity markets are mixed this morning; the Nikkei is up, while the Hang Seng is down.

• Investors will keep an eye on revisions to the US CPI data, due out later today; the data may affect when the Fed will begin its cutting cycle.
• The risks of large revisions, as was the case last year, have put policymakers on edge ahead of this upcoming release.
• Several policymakers recently indicated needing further evidence that price pressures are contained before committing to interest rate cuts.
• Fed Governor Christopher Waller commented recently that he hopes that the CPI revisions will confirm the progress made in bringing inflation down.
• Boston Fed President Susan Collins commented yesterday that she expects the Fed to cut rates by a cumulative 75 bps this year.
• Collins notes that the cutting cycle will commence once data confirms inflation as being on path to 2% amid a strong labour market.
• She is optimistic on inflation's progress but realistic about the risk that it may stall.

• The ECB’s Chief Economist Philip Lane said that the ECB requires more assurance of inflation returning to its target before policymakers would lower interest rates.
• Lane would prefer not to rush into policy easing.

• Locally, President Cyril Ramaphosa delivered his State of the Nation Address (SONA) last night.
• As expected, the president highlighted the success of the ruling party over the past three decades of democracy.
• He noted that the government has established institutions to protect the fundamental rights of all people.
• Several initiatives over the past three decades have been implemented to ensure that the basic needs of South Africans are met, from food, housing, grants, education, and electricity.
• Many in the democracy, however, still face high unemployment; government has taken steps to address the youth unemployment challenge.
• The presidential employment stimulus program has provided 1.7 million work opportunities; the program has been beneficial to young people entering the work environment.
• The president indicated that government needs to correct the injustices of the past. 
• A climate change response fund will be created to support the various areas that suffer from climate change.
• He indicated that government has delivered on commitments to help reduce loadshedding, and that the end to loadshedding is now in reach; government is reforming the renewable energy system to make it more sustainable, competitive, and reliable in the future.
• New regulations to the Visa system were also addressed.
• Several water infrastructure projects are progressing; these were highlighted to address the country’s water concerns.
• The president noted grants and subsidies as being an investment in the future.

• Eskom: Stage 4 loadshedding is currently in place until further notice.

• Brent crude is down this morning, and up by 5.7% year-to-date.
• The gold price is up this morning, and down by 1.4% year-to-date.

• Brent crude oil is currently at $81.40/bbl; ($81.63/bbl*).
• Gold is at $2032/oz ($2031/oz*).
• SA CDS 232bps*, Brazil 135bps* and Turkey 315bps*.
• Yields: US 10yr at 4.15%*, German bund at 2.35%* and SA 10-year generic at 11.26%*, SA’s R2030 at 9.90%*.

* Denotes yesterday’s close.

Key events and data:

• US CPI revisions

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