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In the loop 29 January 2025

In the loop

Shireen Darmalingam

What you should know this morning:

  • The rand is stronger this morning, at R18.65/$, after closing stronger yesterday (R18.70/$*).
  • EM currencies were mixed yesterday; the MXN (+0.7%), ZAR (+0.7%) and BRL (+0.3%) were the biggest gainers; the RUB (-1.2%), THB (-0.6%) and CZK (-0.6%) were the biggest losers.
  • Asian equity markets: the Nikkei is up; Chinese markets are closed for the New Year holidays.
 
  • Central bank watch: the central bank of Chile has kept its main interest rate unchanged, at 5.0%.
  • The central bank cited rising labour costs and a weaker currency as reasons for caution.
 
  • The US FOMC will be meeting today and is expected to keep its Fed funds rate unchanged.
  • US President Donald Trump recently demanded the Fed lower borrowing costs – this despite policymakers flagging a pause.
  • A pause would give the Fed time to assess the economy as well as President Donald Trump's policies.
  • Fed Chair Jerome Powell is due to speak after the announcement and will likely face questions about the impact of Trump's policies on the economy and the Fed’s future interest rate decisions.
 
  • The Swedish Riksbank is largely expected to cut its main interest rate by 25 bps, to 2.25%.
  • The Bank of Canada too will be meeting today and is likely to trim its benchmark interest rate by 25 bps, to 3.0%.
  • In contrast, the Brazilian central bank is due to hike the Selic rate by 100 bps, to 13.25%, later today.
 
  • The US Conference Board consumer confidence index fell unexpectedly in January, to a four-month low of 104.1, from 109.5 in December.
  • Consumers have expressed decreased confidence about the US labour market and economy.
  • Sentiment was also affected by uncertainty about President Donald Trump's policies. 
  • This has resulted in consumers showing less confidence in buying big-ticket items.
  • The current conditions index fell to 134.3 in January, from 144.0 in December.
  • The expectations index also fell in January, to 83.9, from 86.5 in December.
 
  • Japan’s consumer confidence index for January slipped to 35.2, from 36.2 in December.
 
  • Locally, it’s a quiet day as far as data releases are concerned. 
 
  • Brent crude is down this morning, and up by 3.6% year-to-date.
  • The gold price is up this morning, and up by 5.3% year-to-date.
 
  • Brent crude oil is currently at $77.31/bbl; ($77.49/bbl*).
  • Gold is at $2762/oz ($2759/oz*).
  • SA CDS 195bps*, Brazil 180bps* and Turkey 260bps*.
  • Yields: US 10yr at 4.53%*, German bund at 2.56%*, SA 10-year generic at 10.34%*, SA’s R2035 at 10.36%*.
 

* Denotes yesterday’s close. 

Key events and data:

  • 11h00: Eurozone M3 money supply (December)
  • 14h00: US MBA mortgage applications (24 January)
  • 15h30: US advance goods trade balance (December)
  • 21h00: US FOMC interest rate decision – no change expected
 

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