S. Africa: Manufacturing: Production and sales (Preliminary)

ADVISER TO JAPAN'S TAKAICHI SAYS BOJ SHOULD BE CAUTIOUS ABOUT RAISING INTEREST RATES TAKAICHI ADVISER HONDA SAYS NOT CLEAR WHEN NEXT RATE HIKE WOULD BE, BUT TAKAICHI IS LIKELY TO BE CAUTIOUS HONDA SAYS DOLLAR/YEN UNLIKELY TO SURGE ABOVE 155 AS INFLATION EXPECTATIONS REMAIN LOW…

Ms Schnabel started her presentation by noting that since the Governing Council’s previous monetary policy meeting on 23-24 July 2025, interest rate markets in the euro area and the United States had been pulled in different directions, leading to a convergence of policy rate expectations. In the euro area, expectations for interest rates had shifted higher, with reduced uncertainty around the rate outlook, as a consensus had formed that interest rates were currently in a “good place” and close to or at the end of the monetary policy cycle. Markets had fully priced out any rate cut at the current meeting and assigned a significantly lower probability to another 25 basis point rate cut by year-end. The median participant in the ECB Survey of Monetary Analysts anticipated no further rate cuts in 2025, while the median respondent in both the Bloomberg and Reuters surveys did not expect any further rate cut in the current cycle. In the United States, market expectations of a quicker easing cycle had increased after weak labour market data. As a result, the gap between the one-year rate one year ahead in the euro area and the United States had narrowed to its lowest level since September 2024. ECB ACCOUNTS: NO IMMEDIATE PRESSURE TO CHANGE POLICY RATES AT THE CURRENT MEETING THE ENVIRONMENT REMAINED MORE UNCERTAIN THAN USUAL THE CURRENT SITUATION WAS LIKELY TO CHANGE MATERIALLY AT SOME POINT THERE CONTINUED TO BE A HIGH OPTION VALUE TO WAITING FOR MORE INFORMATION.… ECB's Lane proposed no rate change, as opposed to a cut ECB'S SCHNABEL SAW RISK OF SUDDEN, SHARP MARKET CORRECTIONS