In the loop

What you should know this morning:

• The rand is unchanged this morning, at R16.33/$, after closing stronger yesterday (R16.33/$*).
• EM currencies were mixed yesterday; the MXN (+1.0%), ARS (+0.8%) and ZAR (+0.6%) were the biggest gainers; the CZK (-0.5%), KRW (-0.3%) and RON (-0.3%) were the biggest losers.
• Asian equity markets the Nikkei, Hang Seng and Shanghai Composite are down.

• Fed Governor Michael Barr yesterday described the Trump administration’s criminal investigation of the Fed, as well as its ongoing effort to remove Governor Lisa Cook, as an “assault” on the central bank’s monetary policy independence. 
• Barr said inflation remains “elevated,” while the labour market has shown signs of stabilising. 
• In this environment, he argued that policymakers can “take some time” before altering rates.
• He noted that interest rates are currently around their neutral level, neither stimulating nor restraining economic activity. 
• Overall, Barr said the Fed is in a good position with respect to monetary policy.

• Chicago Fed President Austan Goolsbee also commented yesterday that the central bank’s primary focus should remain on bringing inflation back to its 2% target, particularly as the labour market appears to be stabilising.
• He said businesses across his district continue to express concerns about rising costs and affordability.
• He noted that heightened uncertainty has led firms to slow hiring, rather than undertake largescale layoffs. 
• Goolsbee added that inflation remains the Fed’s most pressing challenge. 
• Several policymakers have recently indicated they would likely support holding interest rates steady later this month, following a rise in inflation and a modest increase in the unemployment rate to 4.4% in December.

• Atlanta Fed President Raphael Bostic expects GDP growth to exceed 2% this year.
• Bostic noted that inflationary pressures are likely to continue throughout 2026 as many businesses are still incorporating tariffs into prices.
• He pointed out, however, that inflationary pressures go far beyond tariffs, citing medical costs.

• The US NAHB housing market index for January is scheduled for release today.
• The builder confidence index is likely to have increased to 40 in January, from 39 in December.
• Many potential buyers are still sitting on the sidelines due to affordability concerns.
• As such, any improvement in sentiment is likely to be only modest.
• Industrial and manufacturing production data for December are also due for release today.
• Industrial production is expected to have increased by 0.1% m/m, following a 0.2% m/m increase in November.
• Manufacturing production is expected to have declined by 0.1% m/m in December, after having flatlined in November.

• Locally, it is a quiet day ahead as far as data releases are concerned.

• Brent crude is down this morning, and up by 4.6% year-to-date.
• The gold price is down this morning, and up by 6.4% year-to-date.

• Brent crude oil is currently at $63.64/bbl; ($63.76/bbl*).
• Gold is at $45976oz ($4616/oz*).
• SA CDS 136bps*, Brazil 136bps* and Turkey 217bps*.
• Yields: US 10yr at 4.16%*, German bund at 2.81%*, SA 10-year generic at 8.39%*, SA’s R2035 at 8.26%*.

* Denotes yesterday’s close.

Key events and data: 

• 16h15: US industrial production (December), manufacturing production (December), capacity utilisation (December)
• 17h00: US NAHB housing market index (January)

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