In the loop 17 October 2025

In the loop

Shireen Darmalingam

What you should know this morning:

The rand is weaker this morning, at R17.35/$, after closing unchanged yesterday (R17.34/$*).
EM currencies were mixed yesterday; the COP (+1.3%), CLP (+0.5%) and PEN (+0.5%) were the biggest gainers; the ARS (-3.2%), RUB (-2.4%) and PHP (-0.1%) were the biggest losers.
Asian equity markets the Nikkei, Hang Seng and Shanghai Composite are down.

BOE policymaker Catherine Mann warned that there is “very clear upside evidence” suggesting that UK inflation may remain above the BOE’s 2% target for an extended period.
She noted that monetary policy must stay tight to curb rising household inflation expectations.
Mann disagreed with those who argue that the BOE should “look through” the current inflation spike.
She cautioned that persistently high inflation expectations give companies greater scope to raise prices.

ECB President Christine Lagarde said yesterday that borrowing costs are at appropriate levels to withstand any turbulence the global economy may face.
She noted that the risks to both inflation and economic growth have become more balanced.
Her comments signal comfort with inflation and interest rates settling around 2%.
Chief Economist Philip Lane reaffirmed that the ECB remains committed to making policy decisions based on incoming data.
The central bank has kept its deposit rate at 2% since July, with policymakers indicating little appetite for further cuts.
The ECB views current settings as being in a “good place.”
The IMF this week projected Eurozone growth of 1.2% for this year and 1.1% in 2026 and expects the ECB to maintain its deposit rate at current levels.

In the Eurozone, the final CPI reading for September, due out today is expected to confirm that headline inflation rose to 2.2% y/y.
The detailed breakdown should offer clearer insight into the underlying drivers of services inflation.

US President Trump said yesterday that he plans to meet Russian President Vladimir Putin “within the next two weeks or so” in Budapest to discuss ways to end the war in Ukraine.
Ahead of that meeting, President Trump is hosting Ukrainian President Volodymyr Zelenskyy at the White House today.

Minneapolis Fed President Neel Kashkari struck a cautious tone yesterday, noting that the US economy may not be slowing as much as widely believed.
He noted that the impact of tariffs is taking longer to be felt than previously estimated.
He suggested policymakers could be overestimating the degree of deceleration, commenting that growth appears firmer than assumed.
While acknowledging risks on both sides of the Fed’s mandate, he highlighted that the greater concern is a potential labour market slowdown rather than a sharp inflation rebound.

The US housing and building starts data were initially scheduled to be released today.
The Census Bureau, which releases housing starts and building permits data, is among the agencies that have suspended the collection and distribution of nearly all economic data during the shutdown.

Brent crude oil is currently at $60.94/bbl; ($61.06/bbl*).
Gold is at $4359/oz ($4326/oz*).
SA CDS 165bps*, Brazil 143bps* and Turkey 266bps*.
Yields: US 10yr at 3.97%*, German bund at 2.57%*, SA 10-year generic at 9.12%*, SA’s R2035 at 9.00%*.

* Denotes yesterday’s close.

Key events and data:

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