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In the loop 23 January 2025

In the loop

Shireen Darmalingam

What you should know this morning:

  • The rand is weaker this morning, at R18.50/$, after closing marginally stronger yesterday (R18.49/$*).
  • EM currencies were mixed yesterday; the BRL (+1.4%), CLP (+1.3%) and COP (+0.9%) were the biggest gainers; the CNY (-0.2%), CZK (-0.1%) and ARS (-0.1%) were the biggest losers.
  • Asian equity markets the Nikkei, Hang Seng and Shanghai Composite are up.
 
  • Central bank watch: the Central Bank of the Republic of Turkey (CBRT) is expected to cut its policy rate for a second time in the current cycle, by 250 bps, to 45%. 
 
  • The Eurozone consumer confidence index for January is due out today; the confidence index is expected to have improved slightly, to -14.1, from -14.5 in December.
  • ECB President Christine Lagarde commented at WEF yesterday, noting that the Eurozone must be “prepared” for possible trade tariffs from the US.
  • She noted the fact that President Trump had not imposed blanket tariffs on his first day in office was a "very smart approach”.
  • Lagarde expects the tariffs to be "more selective, focused”.
  • President Trump has, however, indicated that the EU has been “bad” to the US.
  • And has threatened to impose duties on goods imported to the US from the EU.
  • President Trump has claimed that such tariffs would protect US business and the economy.
 
  • ECB Governing Council Olli Rehn noted yesterday that the central bank is confident that inflation would stabilize at its 2% target. 
  • He added that monetary policy will likely cease to be restrictive in the first half of this year.
  • Rehn commented that the ECB continues to  monitor inflation vigilantly.
  • However, he added that further geopolitical tensions could increase upward price pressures.
  • Rehn also said that “the threat of a trade war and the resulting disruption of international trade also pose a risk of rising prices”. 
 
  • The US leading indicator declined by 0.1% m/m in December, following an upwardly revised 0.4% m/m increase in November.
  • The coincident index increased by 0.4% m/m in December, following a 0.2% m/m increase in November.
  • The lagging index was also up by 0.1% m/m in December, after having increased by 0.2% m/m in November.
 
  • Locally, it’s as quiet day as far as data releases are concerned.
 
  • Brent crude is down this morning, and up by 5.5% year-to-date.
  • The gold price is down this morning, and up by 4.8% year-to-date.
 
  • Brent crude oil is currently at $78.77/bbl; ($79.00/bbl*).
  • Gold is at $2751/oz ($2740/oz*).
  • SA CDS 191bps*, Brazil 177bps* and Turkey 265bps*.
  • Yields: US 10yr at 4.61%*, German bund at 2.53%*, SA 10-year generic at 10.28%*, SA’s R2035 at 10.30%*.
 

* Denotes yesterday’s close. 

Key events and data:

  • 15h30: US initial jobless claims (18 January)
  • 17h00: Eurozone consumer confidence (January)
 

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