In the loop 12 March 2025

In the loop

Shireen Darmalingam

What you should know this morning:

The rand is weaker this morning, at R18.27/$, after closing stronger yesterday (R18.23/$*).
EM currencies were mixed yesterday; the RUB (+1.7%), CLP (+1.2%) and COP (+1.2%) were the biggest gainers; the IDR (-0.4%) and TRY (-0.1%) were the biggest losers.
Asian equity markets the Nikkei, Hang Seng and Shanghai composite are down.

Central bank watch: the National Bank of Poland will likely keep the policy rate at 5.75% today.
The Bank of Canada also meets today and is largely expected to cut its benchmark interest rate by 25 bps, to 2.75%.

Several ECB policymakers, including ECB President Christine Lagarde, are due to make comments on the economy and monetary policy later today.

US President Trump yesterday said that he would impose further tariff increases on Canada; Trump had imposed an extra 25% tariffs on steel and aluminium imports.
President Trump was angered by Canada’s plans to retaliate, with tariffs on US dairy products and other goods plus higher prices for electricity exports.
These additional tariffs would have raised the duty on these imports to 50%.
President Trump indicated that these tariffs would have been effective from today.
However, just hours later, President Trump dialled back his tariff threat; Canada has also suspended plans for retaliatory tariffs.
Trump has also announced global tariffs of 25% on all imports of steel and aluminium.
He also extended duties on hundreds of other products which includes metals, from nuts and bolts to bulldozer blades and soda cans.

The US February CPI will be in focus today and is likely to come in at 2.9% y/y, from 3.0% y/y in January.
On a m/m basis, headline CPI is likely to have increased by 0.3% in February, after having increased by 0.5% in January.
Core CPI is expected at 3.2% y/y in February, from 3.3% y/y in January.
Fed Chair Jerome Powell has recently commented that the Fed would need to see “real progress” on inflation or weakness in the labour market before considering cutting the Fed funds rate again.
The Fed meets next week to decide on rates and is largely expected to hold rates steady.

Locally, investors are awaiting the Budget 2025 announcement later this afternoon.
We expect the final Budget to honour some of the key tenets of the initial one (postponed from 19 February to 12 March), including, most importantly, fiscal consolidation, with the debt-GDP ratio peaking in FY25/26.
We also expect the Budget to still promote both pro-growth and pro-poor spending.

Brent crude oil is currently at $70.04/bbl; ($69.56/bbl*).
Gold is at $2912/oz ($2917/oz*).
SA CDS 203bps*, Brazil 179bps* and Turkey 263bps*.
Yields: US 10yr at 4.27%*, German bund at 2.89%*, SA 10-year generic at 10.47%*, SA’s R2035 at 10.47%*.

* Denotes yesterday’s close.

Key events and data:

Read PDF