In the loop 19 March 2025

In the loop

Shireen Darmalingam

What you should know this morning:

The rand is weaker this morning, at R18.14/$, after closing weaker yesterday (R18.12/$*).
EM currencies were mixed yesterday; the RUB (+2.2%), PEN (+0.5%) and PLN (+0.5%) were the biggest gainers; the COP (-1.1%), KRW (-0.5%) and ZAR (-0.2%) were the biggest losers.
Asian equity markets are mixed this morning; the Nikkei and Hang Seng are up, while the Shanghai composite is down.

Central bank watch: the Bank of Japan today kept its benchmark interest rate unchanged, at 0.5%.
The decision comes despite domestic economic signals implying further scope for raising interest rates in Japan.
Policymakers have indicated that they would continue to assess the potential impact on the global economy from escalating trade tensions.

The Fed’s FOMC is due to announce its monetary policy decision later today; the Fed is largely expected to hold rates steady.
The Fed will likely indicate that they will wait for more clarity of the economic impact of the Trump administration policies before considering a rate cut.
The Fed is expected to publish updated economic forecasts today.
Trade uncertainty could see inflation forecasts being increased slightly, while growth forecasts could receive downward revisions.
Boston Fed President Eric Rosengren commented that it is unclear how high tariffs will get, how widespread they may be, and how long they may last.
He indicated that it is hard to estimate the impact on US inflation or unemployment until they have a clear indication on tariffs.

Locally, the February CPI is due out and is expected to come in higher, at 3.4% y/y, from 3.2% y/y in January.
On a m/m basis, CPI is expected to have increased by 1.2% in February, after having increased by 0.3% m/m in January.
Core CPI is expected to have remained unchanged, at 3.5% y/y, in February.
The January retail sales are also on the cards today; retail sales are likely to have increased by 3.9% y/y in January, following a 3.1% y/y increase in December.
On a m/m basis, sales are expected to have increased by 0.3% in January, after having decreased by 0.1% m/m in December.
The SARB kicks off its two-day MPC meeting today and is expected to announce its interest rate decision today.
Consensus expectations are for the SARB to keep the repo rate unchanged, at 7.5%.

Brent crude oil is currently at $70.32/bbl; ($70.56/bbl*).
Gold is at $3038/oz ($3032/oz*).
SA CDS 199bps*, Brazil 175bps* and Turkey 254bps*.
Yields: US 10yr at 4.29%*, German bund at 2.61%*, SA 10-year generic at 10.61%*, SA’s R2035 at 10.60%*.

* Denotes yesterday’s close.

Key events and data:

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