In the loop

What you should know this morning:

• The rand is weaker this morning, at R18.62/$, after closing stronger yesterday (R18.60/$*).
• EM currencies were mixed yesterday; the PLN (+1.9%), HUF (+1.8%) and CLP (+1.4%) were the biggest gainers; the TWD (-0.3%), RUB (-0.3%) and CNY (-0.1%) were the biggest losers.
• Asian equity markets the Nikkei, Hang Seng and Shanghai Composite are down.

• Japan’s unemployment rate came in at 2.5% in January, matching the revised increase to 2.5% in December.
• Japan's unemployment rate peaked at 3.1% in late 2021 under the strains of the Covid pandemic and business and travel restrictions.
• The job-to-applicant ratio edged up to 1.26 in January, from 1.25 in December.
• Consumer confidence slipped in February, to 35.0, from 35.2 in January.

• Eurozone unemployment rate for January is scheduled for release today.
• The unemployment rate is expected to have remained unchanged, at 6.3%.

• The US ISM manufacturing index slipped more than expected in February, to 50.3, from 50.9 in January.
• New orders and employment contracted in February.
• However, in February the gauge of prices paid for materials surged to the highest since June 2022 on the back of mounting tariff concerns.
• Higher input costs pose a challenge for manufacturers against a backdrop of shrinking orders.
• Producers may find it hard to pass on higher costs should sales continue to weaken.
• The ISM noted that “new order placement backlogs, supplier delivery stoppages and manufacturing inventory” weighed on the manufacturing index in February.
• The ISM services index, due for release tomorrow, is also likely to have slipped in February, to 52.7, from 52.8 in January. 

• US President Trump imposed 25% tariffs on Mexico and Canada today.
• President Trump also doubled the existing 10% tariff to 20% on China.
• President Trump is also expected to deliver a speech to Congress today.

• St. Louis Fed President Alberto Musalem commented yesterday that, while he expects inflation to moderate towards the Fed’s 2% goal, it is important to keep inflation expectations in check.
• He noted that long-run inflation expectations have remained broadly stable.
• He added that he would keep an eye out for any signs of expectations becoming unanchored amid rising concerns about higher prices.
• Musalem reiterated that policy should remain “modestly restrictive” until there is evidence that inflation is headed towards the target.

• Locally, GDP growth for Q4:24 is in the spotlight today and is expected at 0.8% q/q (sa), from a 0.3% q/q (sa) contraction in Q3:24.
• Growth was boosted to a significant extent by the bounce in consumer spending, supported by the “two-pot” withdrawals following the retirement reform implemented in September last year.
• Data since then, however, has been disappointing, which underscores downside risk to the growth acceleration that we foresee in 2025.
• On a y/y basis, GDP growth is expected at 1.0% in Q4:24, from 0.3% in Q3:24.

• Brent crude is down this morning, and down by 4.7% year-to-date.
• The gold price is up this morning, and up by 10.2% year-to-date.

• Brent crude oil is currently at $71.08/bbl; ($71.62/bbl*).
• Gold is at $2892/oz ($2890/oz*).
• SA CDS 196bps*, Brazil 179bps* and Turkey 253bps*.
• Yields: US 10yr at 4.13%*, German bund at 2.49%*, SA 10-year generic at 10.50%*, SA’s R2035 at 10.50%*.

* Denotes yesterday’s close. 

Key events and data: 

• 11h30: SA GDP (Q4:24)
• 12h00: Eurozone unemployment rate (January)

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