In the loop 11 March 2025

In the loop

Shireen Darmalingam

What you should know this morning:

The rand is stronger this morning, at R18.31/$, after closing weaker yesterday (R18.32/$*).
EM currencies were largely down yesterday; the CLP (-1.7%), COP (-1.2%) and BRL (-1.1%) were the biggest losers; the RUB gained 3.5%.
Asian equity markets the Nikkei, Hang Seng and Shanghai composite are down.

German industrial activity, out yesterday, overshot expectations in January, increasing by 2.0% m/m, after having declined by an upwardly revised 1.5% m/m in December.
The increase was driven mainly by car production in January.
The m/m improvement points to signs of stabilisation in industry.
On a y/y basis, industrial production was down by 1.6% in January, following a 2.2% decline in December.
The outlook for industry has improved, with plans for increased military and infrastructure spending.

ECB Governing Council member Joachim Nagel noted that the central bank isn’t lowering borrowing costs on autopilot.
He commented that, given current economic conditions, “it is difficult to speculate” on what will happen with monetary policy in April.
Nagel remarked that there are factors that influence monetary policy.
He cited the US’s tariff plans as concerning for the central bank.
The ECB cut the benchmark interest rate by 25 bps last week for a sixth time since June.
The central bank noted that it would keep all options open for the future rate path amid elevated uncertainty about the outlook for economic expansion and inflation.

The Fed Bank of New York survey showed that US consumer inflation expectations (one-year ahead) increased to 3.13% in February, from 3.0% in January.
The survey noted that “the share of households expecting a worse financial situation one year ahead rose to 27.4%, the highest since November 2023”.
Consumers outlook for inflation three to five years ahead remained steady, at 3%.

The US NFIB small business optimism index for February, due out today, is likely to have slipped to 101.0, from 102.8 in January.
The US Job Openings and Labour Turnover Survey (JOLTS) job openings for January are likely to have remained unchanged, at 7.6 million.
The Fed is currently in an external communications black-out period until its FOMC meeting next week.
The Fed is largely expected to keep rates unchanged.

Brent crude oil is currently at $69.26/bbl; ($69.28/bbl*).
Gold is at $2898/oz ($2886/oz*).
SA CDS 204bps*, Brazil 176bps* and Turkey 262bps*.
Yields: US 10yr at 4.21%*, German bund at 2.83%*, SA 10-year generic at 10.49%*, SA’s R2035 at 10.49%*.

* Denotes yesterday’s close.

Key events and data:

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