In the loop

What you should know this morning:

• The rand is weaker this morning, at R17.35/$, after closing stronger yesterday (R17.34/$*).
• EM currencies were mixed yesterday; the RUB (+1.2%), INR (+0.8%) and COP (+0.8%) were the biggest gainers; the ARS (-0.4%) and TRY (-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.

• UK monthly GDP data for August, due for release today, is likely to reinforce evidence of a slowdown emerging in the second half of 2025.
• The economy is likely to have expanded by 0.1% m/m in August, after having flatlined in July.
• Industrial production for August, also out today, likely increased by 0.2% m/m, following a 0.9% m/m decline in July.
• Manufacturing production is expected to have increased by 0.2% m/m in August, following a 1.3% m/m decline in July.

• ECB Governing Council member Joachim Nagel has said that the ECB is in a position of equilibrium with inflation and interest rates.
• Nagel signalled the bar for any further rate cuts as very high.
• He argued that monetary policy should remain steady unless there is a significant deterioration in the economic outlook.
• He remarked that the ECB must avoid premature easing that could undermine price stability.

• The Fed’s latest Beige Book indicated that US economic activity was largely unchanged in recent weeks, with employment levels remaining broadly stable. 
• Consumer spending showed a slight decline, while prices continued to edge higher. 
• Several districts reported that input costs were rising at an accelerating pace. 
• The Fed noted that “tariff-induced input cost increases were reported across many districts, though the extent to which these higher costs were passed on to final prices varied”.
• With official economic data limited during the government shutdown, these anecdotal insights from businesses and consumers have taken on added significance. 
• Fed Chair Jerome Powell has signalled that the central bank is likely to lower interest rates later this month.

• Fed Governor Stephen Miran noted yesterday that rising trade tensions and policy uncertainty have significantly increased downside risks to US economic growth.
• He noted that this is increasing the urgency for the Fed to accelerate its path toward a neutral policy stance.
• Miran commented that the recent escalation in US-China trade frictions introduced a “new tail risk” to the outlook.
• Miran did not call for deeper cuts than previously advocated; however, he stressed that the balance of risks now warrants quicker action.
• He further reiterated his preference for a more aggressive easing cycle than the consensus.
• He suggested that two additional rate cuts this year “sound realistic”.

• The US NAHB housing market index will continue to be published during the US government shutdown.
• The index is compiled by National Association of Home Builders, a private industry group.
• The index is expected to have increased to 33 in October, from 32 in September.

• Locally, it’s a quiet day as far as data releases are concerned.

• Brent crude is up this morning, and down by 16.4% year-to-date.
• The gold price is up this morning, and up by 61.0% year-to-date.

• Brent crude oil is currently at $62.42/bbl; ($61.91/bbl*).
• Gold is at $4225/oz ($4207/oz*).
• SA CDS 167bps*, Brazil 142bps* and Turkey 265bps*.
• Yields: US 10yr at 4.02%*, German bund at 2.57%*, SA 10-year generic at 9.17%*, SA’s R2035 at 9.05%*.

* Denotes yesterday’s close.

Key events and data: 

• 08h00: UK monthly GDP (August), industrial production (August), manufacturing production (August), trade balance (August)
• 11h00: Eurozone trade balance (August)
• 16h00: US NAHB housing market index (October)

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