In the loop 17 February 2025

In the loop

Shireen Darmalingam

What you should know this morning:

The rand is stronger this morning, at R18.34/$, after closing stronger on Friday (R18.38/$*).
EM currencies were mixed on Friday; the BRL (+1.2%), ZAR (+1.0%) and MXN (+0.9%) were the biggest gainers; the RUB (-2.0%) and TRY (-0.4%) were the biggest losers.
Asian equity markets the Nikkei, Hang Seng and Shanghai Composite are up.

Central bank watch: central bank monetary policy decisions are due in Australia, New Zealand and Indonesia this week.
The Reserve Bank of Australia will likely begin an easing cycle with a 25 bps interest rate cut tomorrow.
The Reserve Bank of New Zealand is expected to cut its benchmark interest rate by 50 bps on Wednesday to stem the weakness in the economy.
The Central Bank of Indonesia is likely to hold rates steady on Wednesday.
The Central Bank of Nigeria will likely hike rates by 25 bps, to 27.75%, on Thursday.

Japan’s CPI for January, due out on Friday, is likely to have increased; surging food prices are expected to push headline inflation to 4% y/y.

The UK labour data for December is due out tomorrow; the unemployment rate is expected to have increased to 4.5% in December, from 4.4% in November.
However, a low response rate continues to distort the Labour Force Survey.
UK headline CPI, due out on Wednesday, likely accelerated in January, to 2.8% y/y, from 2.5% y/y in December.
Retail sales for January are also on the cards on Wednesday; an uptick in retail sales is expected following the weakness during the festive period.
Eurozone and UK flash PMI data for January are due on Friday and will provide an indication of how economic growth is developing in Q1:25.
The German ZEW survey is scheduled for release tomorrow; the expectations gauge may increase ahead of the snap elections next week on 23 February.

The US Fed FOMC January meeting minutes are due out on Wednesday.
The Empire manufacturing survey for February is also due out on Wednesday; consumer sentiment likely increased in February.
The US NAHB housing market index for February is due out tomorrow; sentiment likely slipped in February, albeit only slightly.
Housing starts and building permits for January are due out on Wednesday; both housing starts and building permits are expected to have decreased in January.
The leading index for January is due out on Thursday and likely declined by 0.1% m/m, the same as in December.
US existing home sales, due out on Friday, will likely have declined by 2.6% m/m in January, after having increased by 2.2% m/m in December.
The University of Michigan sentiment (final estimate) index for February is also due out on Friday.
The sentiment index is likely to have remained unchanged from its previous estimate, at 67.8.
The US flash PMI data for February is also scheduled for release on Friday; the manufacturing PMI is expected to have remained steady in February, while the services PMI is expected to have improved.

Locally, Finance Minister Enoch Godongwana is scheduled to table Budget 2025 on Wednesday.
Stats SA releases the Quarterly Labour Force Survey tomorrow for Q4:24; the unemployment rate improved to 31.2% in Q3:24, from 33.5% in Q2:24.
The January CPI is due out on Wednesday and is expected to come in higher at 3.2% y/y, from 3.0% y/y in December.
Core CPI is expected at 3.5% y/y January, from 3.6% in December.
The December retail sales is also on the cards on Wednesday; retail sales came in at 7.7% y/y and 0.8% m/m in November.

Brent crude oil is currently at $74.82/bbl; ($74.74/bbl*).
Gold is at $2903/oz ($2882/oz*).
SA CDS 193bps*, Brazil 166bps* and Turkey 245bps*.
Yields: US 10yr at 4.47%*, German bund at 2.41%*, SA 10-year generic at 10.43%*, SA’s R2035 at 10.47%*.

* Denotes Friday’s close.

Key events and data:

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