In the loop

What you should know this morning:

• The rand is weaker this morning, at R15.87/$, after closing stronger yesterday (R15.86/$*).
• EM currencies were mixed yesterday; the KRW (+0.7%), ZAR (+0.6%) and PHP (+0.4%) were the biggest gainers; the HUF (-0.5%), INR (-0.1%) and PLN (-0.1%) were the biggest losers.
• Asian equity markets are mixed this morning; the Nikkei and Shanghai Composite are up, while the Hang Seng is down.

• According to the Royal Institution of Chartered Surveyors (RICS) UK Residential Market Survey, the headline net balance for house prices improved to -10% in January, from -13% in December.
• Inquiries from new buyers, agreed sales and house prices became less negative in January.

• UK GDP data for Q4:25 today should show that the economy ended last year on a slightly stronger footing. 
• Growth is expected to have increased by 0.2% q/q in Q4:25, following a 0.1% q/q expansion in Q3:25. 
• There are indications that uncertainty has eased in the wake of the November Budget, while the decline in interest rates over the past 18 months is expected to feed through more meaningfully into economic activity.
• The UK monthly GDP data for December is also due out today.
• GDP is expected to have risen by 0.1% m/m in December, following a 0.3% m/m increase in November.
• Industrial and manufacturing output data for December will also be released.
• Industrial production is expected to have stagnated, after rising by 1.1% m/m in November, while manufacturing output is forecast to have decreased by 0.1% m/m, following a 2.1% m/m gain previously.

• Kansas City Fed President Jeff Schmid has said that the Fed should keep interest rates at a “somewhat restrictive” level.
• He cited concerns that inflation remains too elevated. 
• He warned that further rate cuts would risk allowing high inflation to persist for longer, and he stressed that policy should continue to exert some restraint on the economy. 
• However, he noted that there are few clear signs of meaningful economic slowdown, with growth maintaining momentum and inflation still running high. 
• Schmid also argued that the composition of the Fed's Treasury holdings should reflect the broader market to preserve the central bank's independence and avoid blurring the distinction between monetary and fiscal policy.

• US existing home sales for January is scheduled for release today.
• Existing home sales increased more than expected by 5.1% m/m (to 4.35m) in December, after having increased by a revised 0.7% m/m (4.14m) in November.
• The median home price rose 0.4% y/y in December, to $405,400.

• Locally, the IMF yesterday noted that the SA economy has demonstrated resilience, supported by its abundant natural resources and strong institutions, including a credible central bank.
• Growth is projected to edge higher, but the outlook remains subject to risks.
• Interest rates may need to stay higher for longer to anchor inflation expectations.
• The Fund highlighted that long-standing structural constraints, including rigidities in the economy, inadequate infrastructure, governance weaknesses and rising public debt, continue to limit growth and hinder job creation. 
• It expects inflation to average 3.6% this year, with a return to the central bank's target only by 2028. 
• The IMF added that monetary policy may need to remain tighter than otherwise anticipated to ensure an orderly convergence of inflation expectations towards the new 3% target.

• President Cyril Ramaphosa will deliver his State of the Nation Address (SONA) later today.
• Mining production for December is due out today; production declined by 2.7% y/y and 5.9% m/m in November.
• Manufacturing production for December scheduled for release; production decreased by 1.0% y/y and 1.1% m/m in November. 

• Brent crude is up this morning, and up by 14.3% year-to-date.
• The gold price is down this morning, and up by 17.3% year-to-date.

• Brent crude oil is currently at $69.57/bbl; ($69.40/bbl*).
• Gold is at $5066/oz ($5084/oz*).
• SA CDS 137bps*, Brazil 129bps* and Turkey 215bps*.
• Yields: US 10yr at 4.17%*, German bund at 2.79%*, SA 10-year generic at 8.05%*, SA's R2035 at 7.94%*.

* Denotes yesterday's close.

Key events and data: 

• 09h00: UK GDP (Q4:25), monthly GDP (December), industrial production (December), manufacturing production (December), trade balance (December)
• 11h30: SA mining production (December)
• 13h00: SA manufacturing production (December)
• 15h30: US initial jobless claims (7 February)
• 17h00: US existing home sales (January)
• 19h00: SA President Cyril Ramaphosa's State of the Nation Address (SONA)

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