In the loop

What you should know this morning:

• The rand is weaker this morning, at R15.98/$, after closing weaker yesterday (R15.97/$*).
• EM currencies were mixed yesterday; the ARS (+0.6%), KRW (+0.6%) and THB (+0.5%) were the biggest gainers; the ZAR (-0.7%), BRL (-0.5%) and CLP (-0.4%) were the biggest losers.
• Asian equity markets the Nikkei, Hang Seng and Shanghai Composite are down.

• BOE policymaker Sarah Breeden noted yesterday that it is “reasonable to expect” a further 25 bps rate cut in rates by the end of April.
• She noted that now is the time for the central bank to provide more support to the economy by lowering interest rates.
• Breeden added that “if we continue to have the economy develop as expected and if there are no shocks”, it would be reasonable to expect a cut over the next few meetings.

• US existing home sales decreased more than expected by 8.4% m/m (to 3.91m) in January, after having increased by a revised 4.4% m/m (4.27m) in December.
• The median home price rose 0.9% y/y in January, to $396,800.

• The US January CPI report will be a key focus today. 
• Headline inflation is expected to have moderated to 2.5% y/y in January, from 2.7% y/y in December.
• On a m/m basis, CPI is expected to have increased by 0.3% in January, matching December's increase.
• Core CPI is likely to come in at 2.5% y/y in January, from 2.6% y/y in December.

• Locally, President Cyril Ramaphosa's State of the Nation (SONA) outlined government's assessment of national progress and set out its policy priorities for the year ahead. 
• President Cyril Ramaphosa emphasised that the SA economy is in a stronger position than a year ago.
• He cited four consecutive quarters of GDP growth, lower inflation, a firmer rand, and stabilised borrowing costs. 
• However, he stressed that growth needs to accelerate further to meet the country's social and economic needs, particularly in addressing unemployment and poverty.
• Reducing joblessness and poverty remains central to the government's policy agenda. 
• Public employment programmes have been expanded and better coordinated to create clearer pathways into sustainable, long-term work.
• Ramaphosa also acknowledged persistent challenges, including service delivery failures, high levels of crime and ongoing fiscal constraints.
• The President reaffirmed that government would continue to pursue inclusive growth, job creation and large-scale infrastructure development. 
• He highlighted ongoing reforms under Operation Vulindlela (OV) aimed at attracting investment, increasing competition, and modernising key sectors of the economy. 
• The SONA also recognised weaknesses at local government level, particularly in water, roads and electricity provision.
• The president committed to reforming municipal funding models and establishing professionally managed utilities. 
• Ramaphosa underscored the importance of unity and cooperation under the Government of National Unity to advance the country's reform agenda.

• Brent crude is down this morning, and up by 10.8% year-to-date.
• The gold price is up this morning, and up by 15.2% year-to-date.

• Brent crude oil is currently at $67.40/bbl; ($67.52/bbl*).
• Gold is at $4981/oz ($4922/oz*).
• SA CDS 136bps*, Brazil 129bps* and Turkey 212bps*.
• Yields: US 10yr at 4.11%*, German bund at 2.77%*, SA 10-year generic at 8.04%*, SA's R2035 at 7.94%*.

* Denotes yesterday's close.

Key events and data: 

• 12h00: Eurozone GDP (Q4:25), trade balance (December), employment (Q4:25)
• 15h30: US CPI (January)

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