In the loop

What you should know this morning:

• The rand is stronger this morning, at R18.80/$, after closing weaker yesterday (R18.81/$*).
• EM currencies were mixed yesterday; the COP (+1.1%), MXN (+1.0%) and BRL (+0.6%) were the biggest gainers; the PLN (-1.3%), RUB (-1.1%) and THB (-1.1%) were the biggest losers.
• Asian equity markets: the Nikkei and Hang Seng are up.

• ECB Governing Council member Gediminas Simkus noted yesterday that the ECB might cut borrowing costs at its next meeting on 6 March.
• Simkus added that he supports a further 25 bps rate cut, to 2.5%.
• He noted policy decisions beyond March as depending on the available economic data at the time.
• Simkus remarked that policymakers should not focus too much on the concept of neutral rates.
• Instead, the focus should be on achieving the bank’s inflation target.
• Simkus, however, warned that US President Donald Trump’s recently announced tariff actions elevate uncertainty on the bloc.

• ECB Governing Council member Peter Kazimir yesterday concurred that the central bank would likely cut rates further at the next policy meeting.
• He added though that the ECB would need to remain cautious and flexible as it is too early to declare victory over inflation.
• Kazimir noted the overall inflation trend as “encouraging”.
• He also commented that “lacklustre economic growth remains a concern” and that the “pace of recovery is rather disappointing”.

• US President Donald Trump has postponed trade tariffs on Canada and Mexico by a month. 
• President Trump's tariffs on China take effect today.
• China has responded by imposing counter levies, with a 10% tariff on imports of crude oil and other goods from the US.

• Chicago Fed President Austan Goolsbee noted yesterday that the central bank should proceed more cautiously in cutting rates amid mounting uncertainty introduced by the Trump administration.
• Goolsbee noted that the impact of the tariffs would be hard to gauge, and might require slowing the pace of cuts to determine the underlying economic trend.
• Atlanta Fed President Raphael Bostic noted that he would prefer that the Fed wait before cutting interest rates again to see the impact of the 100 basis points of cuts thus far.
• Bostic noted that rising uncertainty over the economy's direction in 2025 as a concern.
• Fed Chair Jerome Powell also noted that policymakers would want to see more progress on inflation and that they are in no hurry to lower interest rates.

• The US Job Openings and Labour Turnover Survey (JOLTS) job openings for December is in the spotlight today.
• Job openings are likely to have slipped to 8.0 million, from 8.098 million in November.
• The data comes ahead of the non-farm payrolls (NFP) for January scheduled for release on Friday.
• NFP are expected to have increased by 170k, following a 256k increase in December.
• The unemployment rate is likely to have remained unchanged, at 4.1%, in January.

• Locally, it is quiet day as far as data releases are concerned.

• Brent crude is down this morning, and up by 0.7% year-to-date.
• The gold price is down this morning, and up by 7.3% year-to-date.

• Brent crude oil is currently at $75.20/bbl; ($75.96/bbl*).
• Gold is at $2816/oz ($2817/oz*).
• SA CDS 206bps*, Brazil 179bps* and Turkey 261bps*.
• Yields: US 10yr at 4.56%*, German bund at 2.38%*, SA 10-year generic at 10.44%*, SA’s R2035 at 10.46%*.

* Denotes yesterday’s close. 

Key events and data:

• 17h00: US JOLTS job openings (December), factory orders (December), durable goods orders (December – final)

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