In the loop 07 March 2025

In the loop

Shireen Darmalingam

What you should know this morning:

The rand is stronger this morning, at R18.13/$, after closing stronger yesterday (R18.15/$*).
EM currencies were mixed yesterday; the RUB (+1.6%), ZAR (+1.1%) and MXN (+0.4%) were the biggest gainers; the PLN (-0.3%), THB (-0.3%) and HUF (-0.2%) were the biggest losers.
Asian equity markets are mixed this morning; the Nikkei and Shanghai are down, while the Hang Seng is up.

The BOE policymaker Catherine Mann commented that gradual interest rate changes no longer send clear signals to volatile financial markets.
Mann commented that larger interest rate moves are necessary to “cut through” the noise for the good of the UK economy.
Mann noted that her decision to cut rates was aggressive because signals from both policymakers and economic data were being drowned out by “cross-border spillovers” transmitted through financial markets.

US President Trump has exempted Mexico from his 25% tariffs on goods and services under the USMCA trade agreement.
The exemption is expected to end on 2 April.
President Trump noted that he exempted Mexico “as an accommodation, and out of respect for President Sheinbaum”.
President Trump has indicated that he would exempt Canadian autos and auto parts that are imported under the trade deal.

Atlanta Fed President Raphael Bostic yesterday remarked that it will likely take several months to ascertain the impact of President Donald Trump’s policies and other factors affecting the economy.
He added policies under the Trump administration could impact the US economy in different ways, which adds to uncertainty about the economy.
Bostic suggested that policymakers could keep the Fed funds rate unchanged until late spring.
Policymakers have recently signalled that they expect to keep rates unchanged for some time while they wait for more evidence that inflation is moderating towards the bank’s 2% target.

Non-farm payrolls (NFP) for February, in the spotlight today, are expected to have increased, by 160k, following an increase of 143k in January.
Bad weather may, however, have impacted hiring in February.
Payrolls may also have been impacted by sectors affected by President Trump’s executive order temporarily freezing federal funding and hiring.
The unemployment rate is likely to have remained unchanged, at 4.0%, in February.
Consumer credit for February is also on the cards today.

Locally, the SARB’s gross and net reserves for February are scheduled for release today.
Gross reserves were at $65.88bn in January, and net reserves at $61.33bn.

Brent crude oil is currently at $69.53/bbl; ($69.46/bbl*).
Gold is at $2910/oz ($2915/oz*).
SA CDS 201bps*, Brazil 175bps* and Turkey 260bps*.
Yields: US 10yr at 4.27%*, German bund at 2.83%*, SA 10-year generic at 10.49%*, SA’s R2035 at 10.48%*.

* Denotes yesterday’s close.

Key events and data:

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