Investing.com – US stock futures hovered below the flatline as traders looked ahead to a speech from US President Donald Trump to business and political leaders in Davos, Switzerland. Elsewhere, Electronic Arts (NASDAQ:EA) cuts its net bookings outlook on weakness at its crucial soccer video game franchise. Nvidia-supplier SK Hynix reports bumper profits amid solid demand from the AI industry for its chips.

1. Futures dip

US stock futures edged down on Thursday, pointing to a easing in stocks after the benchmark S&P 500 touched a fresh record intraday high in the prior session.

By 03:44 ET (08:44 GMT), the S&P 500 futures contract had slipped by 14 points or 0.2%, Nasdaq 100 futures had fallen by 109 points or 0.5%, and Dow futures had inched down by 23 points or 0.1%.

Underpinning Wednesday’s jump in the S&P 500 were technology stocks, with AI-exposed giants like Nvidia and Microsoft (NASDAQ:MSFT) among the biggest gainers. The sector’s best individual performer was Netflix (NASDAQ:NFLX), which reported strong holiday quarter results that were bolstered by a peak in the number of subscribers to the streaming video platform.

Investor appetite for tech names was also whetted by President Trump’s unveiling of a new $500 billion private-sector AI infrastructure investment plan backed by groups like software firm Oracle (NYSE:ORCL), ChatGPT-maker OpenAI, and Japanese conglomerate SoftBank (TYO:9984) — although questions swirled around funding for the project.

Sentiment has been buoyed in recent days by solid US economic data and hopes for cooling inflation, along with a move by Trump to stop short of placing harsh universal tariffs on friends and adversaries alike on the first day of his administration. However, Trump has threatened to slap possible incoming levies on Mexico, Canada, China, and the European Union.

2. Trump to address Davos

Trump is set to deliver a speech remotely to the World Economic Conference in Davos, Switzerland on Thursday, according a meeting schedule cited by Reuters.

The exact topics Trump will cover in his first major speech to global business and political leaders since returning to the White House remain unclear. He is due to speak at 11:00 ET (16:00 GMT), Reuters reported.

Since his inauguration earlier this week, Trump has signed a slew of executive orders that have addressed a wide range of issues, including immigration, diversity, and energy. He has also moved to take the US out of the Paris climate agreement and the World Health Organization, and has said he will push to rename the Gulf of Mexico to the Gulf of America and take back the Panama Canal from Panama.

3. EA cuts net bookings guidance

Shares in Electronic Arts slumped in extended hours trading after the video game maker slashed its guidance for net bookings due to sluggish performance of its soccer titles.

In a preliminary earnings announcement, the company, which develops the “EA SPORTS FC” franchise of games, said the series had been hit by a slowdown despite momentum early in the quarter until December 31 “did not sustain through to the end” of the period.

Separately, its “Dragon Age” offering engaged around 1.5 million players, down by almost 50% from EA’s expectations.

EA subsequently said it now expects net bookings, a measure of net revenue and deferred revenue for games available online, to be around $2.215 billion for the quarter, below its prior projections of $2.4 billion to $2.55 billion.

The announcement comes amid a wave of corporate earnings this week. On Thursday, Union Pacific (NYSE:UNP), Elevance Health (NYSE:ELV), and GE Aerospace (NYSE:GE) are all set to post prior to the market open, while Texas Instruments (NASDAQ:TXN) and CSX Corporation (NASDAQ:CSX) are expected to reveal their latest returns after the bell on Wall Street.

4. Nvidia-supplier SK Hynix’s bumper profits

SK Hynix (KS:000660) posted a sharp increase in its fourth-quarter profit on Thursday, as the semiconductor firm was bolstered by increased demand for high-end chips from the artificial intelligence industry. 

Operating profit hit a record high of 8.08 trillion won ($5.64 billion) in the three months to December 31, slightly above Reuters estimates of 8 trillion won. Revenue also jumped by 75% to 19.77 trillion won. 

The company is the second-largest maker of memory chips in the world, and beat out rivals Samsung (KS:005930) and Micron (NASDAQ:MU) in bringing advanced high-bandwith memory (HBM) chips into production over the past year. 

HBM chips are a key component of AI processors, with SK Hynix serving as a major supplier to AI giant Nvidia (NASDAQ:NVDA). The company has greatly benefited from a ramp-up in AI demand over the past two years, with its investments in increased capacity and advanced chip production now bearing fruit.

5. Bitcoin declines as Trump boost wavers

Bitcoin dipped on Thursday, in a sign that a rally sparked by hype over potentially more crypto-friendly policies under the Trump administration could be fading.

Cryptocurrency markets have taken fleeting support from the Securities and Exchange Commission, which, under new leadership, said earlier this week that it will form a task force to help advise on crypto regulation.

Meanwhile, the president’s token, $TRUMP, which has logged wild price swings since its debut last week, also contributed to additional volatility. The memecoin was down sharply on Thursday.

At the same time, Bitcoin fell 2.8% to $102,356.2 by 03:30 ET (08:30 GMT). The world’s biggest cryptocurrency briefly hit a record high above $109,000 when Trump — who has pledged to be the “crypto president” — was sworn in on Monday.

WARSAW (Reuters) – Polish central banker Joanna Tyrowicz still does not see any grounds for interest rate cuts given the continued overshoot of the inflation target, she told a private radio station Tok FM on Thursday.

The National Bank of Poland has kept its main interest rate on hold at 5.75% since October 2023 and central bank governor Adam Glapinski said last week that it was far too early to talk about easing policy.

Annual inflation in December came in slightly below a flash reading at 4.7%, but still well outside the central bank’s target range of between 1.5% and 3.5%.

“I don’t see any grounds for cuts. … We are not cutting rates because we are not at the target. We are not bringing inflation to the target,” said Tyrowicz, considered one of the hawks on the Monetary Policy Council (MPC).

Tyrowicz has been its only MPC member to support raising interest rates, according to the most recently published voting records.

She also said that any economic decisions of the new U.S. administration should not have a direct impact on Poland’s economic situation.

“Very important for our economy is the improvement of the situation of our global trading partners, especially the European ones,” she said.

“If they suffer any negative consequences of these changes, this may have some negative indirect implications for our economy.”

Investing.com — Joanna Tyrowicz, a central banker in Poland, has reiterated her stance against interest rate cuts, citing the ongoing surpassing of the inflation target as the reason.

Speaking on private radio station Tok FM on Thursday, Tyrowicz underscored that the current inflation rate is not aligned with the target, hence the decision not to reduce interest rates.

Tyrowicz, who is known for her hawkish views on the Monetary Policy Council (MPC), stated that there are no valid reasons for rate cuts at this time. She added that the council’s primary focus is not to bring inflation down to the target, but rather to manage it effectively.

In addition to her comments on interest rates, Tyrowicz also touched on the potential impact of the new U.S. administration’s economic decisions on Poland. She stated that these decisions should not directly affect Poland’s economic situation.

Tyrowicz emphasized the significance of the economic health of Poland’s global trading partners, particularly those in Europe, on the country’s economy.

She warned that any negative consequences experienced by these partners due to changes in economic policy could indirectly impact Poland’s economy.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.

Today’s announcement from Norges Bank indicated a shift towards easing monetary policy, with expectations to begin cutting interest rates in March. The central bank maintained its policy rate at 4.5%, aligning with the unanimous predictions of forecasters.

In a move that follows behind other developed market (DM) central banks, Norges Bank is now poised to reduce interest rates, likely starting with a 25 basis point cut at its next meeting.

Despite the anticipated change in direction, Norges Bank emphasized the continued necessity of a restrictive monetary policy stance.

While no new projections were released during Monday’s statement, the December forecasts suggested a gradual decline in the policy rate to an average of 3.8% by the fourth quarter of 2025, reaching 3.2% by the end of 2026 and 2.9% by the same period in 2027.

Analysts at Capital Economics have commented on the projected pace of loosening, labeling it as relatively slow. However, they also noted that central bank rate forecasts often lack reliability for periods extending beyond a few months.

Based on inflation trends, Capital Economics anticipates that the bank could implement quarter-on-quarter cuts of 25bp, ultimately bringing the policy rate down to 3% by mid-2026.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.

Investing.com — Singapore’s consumer inflation experienced a cool down last year, aligning with the central bank’s expectations and indicating a possible opportunity for monetary easing.

The consumer price index (CPI) saw a rise of 1.6% last month compared to the same month a year earlier, according to the Department of Statistics. This increase remained steady from November’s growth and was slightly above the median estimate of a 1.55% rise, as predicted by a Wall Street Journal poll of 10 economists.

The core CPI, a closely monitored measure that excludes private road transport and accommodation costs, increased by 1.8% in December from a year prior. This figure is a slight drop from November’s 1.9% growth and slightly above the median estimate of a 1.7% increase.

While the central bank of Singapore does not have a fixed target for inflation, it perceives a core inflation rate slightly below 2% as being in line with overall price stability in the economy.

In 2024, the average core inflation was 2.7%, a significant decrease from the 4.2% rate observed in 2023. The headline measure was recorded at 2.4% versus 4.8% in 2023, indicating that the efforts of policymakers to control price pressures have been successful.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.

By Darya Korsunskaya, Guy Faulconbridge and Gleb Stolyarov

MOSCOW (Reuters) – President Vladimir Putin has grown increasingly concerned about distortions in Russia’s wartime economy, just as Donald Trump pushes for an end to the Ukraine conflict, five sources with knowledge of the situation told Reuters.

Russia’s economy, driven by exports of oil, gas and minerals, grew robustly over the past two years despite multiple rounds of Western sanctions imposed after its invasion of Ukraine in 2022. 

But domestic activity has become strained in recent months by labour shortages and high interest rates introduced to tackle inflation, which has accelerated under record military spending.

That has contributed to the view within a section of the Russian elite that a negotiated settlement to the war is desirable, according to two of the sources familiar with thinking in the Kremlin.

Trump, who returned to office on Monday, has vowed to swiftly resolve the Ukraine conflict, Europe’s biggest since World War Two. This week he has said more sanctions, as well as tariffs, on Russia are likely unless Putin negotiates, adding that Russia was heading for “big trouble” in the economy. A senior Kremlin aide said on Tuesday that Russia had so far received no specific proposals for talks. 

“Russia, of course, is economically interested in negotiating a diplomatic end to the conflict,” Oleg Vyugin, former deputy chairman of the Central Bank of Russia said in an interview, citing the risk of growing economic distortions as Russia turbo-charges military and defence spending.

Vyugin was not one of the five sources, who all spoke on condition of anonymity due to the sensitivity of the situation in Russia. The extent of Putin’s concerns about the economy, described by the sources, and the influence of that on views within the Kremlin about the war, are documented here for the first time.

Reuters has previously reported that Putin is ready to discuss ceasefire options with Trump but that Russia’s territorial gains in Ukraine must be accepted and that Ukraine must drop its bid to join the U.S-led NATO military alliance.

The Kremlin did not immediately respond to requests for comment about Putin’s view on the economy and Ukraine talks. 

Trump “is focused on ending this brutal war,” by engaging a wide range of stakeholders, White House National Security Council spokesperson Brian Hughes said in response to Reuters’ questions. In recent weeks, Trump’s advisers have walked back his boast that the three-year-old war could be resolved in a day.

Just days before Trump’s inauguration, outgoing U.S. president Joe Biden’s administration imposed the broadest package of sanctions to so far target Russia’s oil and gas revenues, a move that Biden’s national security adviser, Jake Sullivan, said would give Trump leverage in any talks by applying economic pressure on Russia.

Putin has said that Russia can fight on as long as it takes and that Moscow will never bow before another power over key national interests.

Russia’s $2.2 trillion economy had until recently shown remarkable endurance during the war, and Putin has praised top economic officials and business for circumventing the most stringent Western sanctions ever imposed on a major economy.

After contracting in 2022, Russia’s GDP grew faster than the European Union and the United States in 2023 and 2024. This year, however, the central bank and the International Monetary Fund forecast sub-1.5% growth, although the government projects a slightly rosier outlook.  

Inflation has edged toward double digits despite the central bank hiking the benchmark interest rate to 21% in October.

“There are some issues here, namely inflation, a certain overheating of the economy,” Putin said in an annual news conference on Dec. 19. “The government and the central bank are already tasked with bringing the tempo down,” he said. 

‘WAR GOALS MET’

Last year, Russia made its most significant territorial gains since the early days of the war and it now controls nearly a fifth of Ukraine.

Putin believes key war goals have already been met, including control of land that connects mainland Russia to Crimea, and weakening Ukraine’s military, said one of the sources familiar with thinking in the Kremlin.

The Russian president also recognizes the strain the war is putting on the economy, the source said, citing “really big problems” such as the impact of the high interest rate on non-military businesses and industry. 

Russia has hiked defence spending to a post-Soviet high of 6.3% of GDP this year, accounting for a third of budget expenditure. The spending has been inflationary. Along with wartime labour shortages, it has driven wages higher.

On top of that, the government has sought higher tax revenues to reduce the fiscal deficit.

Vyugin, the former deputy governor, said sustained high rates would put pressure on the balance sheets of businesses and banks.

Russian coal and steel producer Mechel, owned by businessman Igor Zyuzin and his family, on Tuesday said it had restructured its debt, under pressure from low coal prices and high interest rates.

PUTIN CONCERN

Putin’s frustration was evident at a Kremlin meeting with business leaders the evening of Dec. 16, where he scolded top economic officials, according to two of the sources, who have knowledge of discussions about the economy in the Kremlin and government. 

One of the sources, who was briefed after the meeting, was told Putin was visibly displeased after hearing private investment was being cut because of the cost of credit.

The Kremlin released Putin’s introductory comments praising business but did not identify any of the business participants at the mostly closed-door meeting. Reuters confirmed with one source that Central Bank Governor Elvira Nabiullina was not present.

On Wednesday, Putin said in televised comments to ministers that he had recently discussed with business leaders the risks of a decrease in credit activity for long-term growth, in an apparent reference to the December meeting. 

Some of Russia’s most powerful businessmen, including Rosneft CEO Igor Sechin, Rostec CEO Sergei Chemezov, aluminium tycoon Oleg Deripaska and Alexei Mordashov, the largest shareholder in steel-maker Severstal, have publicly criticised the high interest rates.

Nabiullina has faced pressure not to raise rates further from two of Russia’s most powerful bankers – her former boss, Sberbank CEO German Gref, and VTB CEO Andrei Kostin – who feared that Russia was heading towards stagflation, one source with knowledge of discussions about the economy said.

In his Dec. 19 comments, Putin called for a “balanced rate decision.” The next day, at its last monetary policy meeting of the year, the central bank held the rate at 21% despite market expectations that it would hike by 200 basis points.

In a speech after the decision, Nabiullina denied caving in to pressure. She said criticism of central bank policy increased when rates were high.

Nabiullina, Gref and Kostin did not immediately respond to requests for comment for this story.

NABIULLINA 

Nabiullina, a former economic aide to Putin who also served as his economy minister, is one of Russia’s most powerful women: she has served as central bank governor since June 2013 and three of the sources said that Putin trusts her.

Just a few weeks after sending troops into Ukraine in 2022, Putin proposed Nabiullina take a third term as central bank chief. Her term ends in 2027. 

Her supporters say critics miss the underlying cause of the inflation – the vast spending on the war – and say that without her, economic stability would have be threatened. 

Some lawmakers have called for her to be replaced, an unlikely outcome, according to two of the sources.

“No one in such a situation will change the governor of the central bank,” said one of the sources, who is acquainted with discussions about the economy. “Nabiullina’s authority is indisputable, the president trusts her.” 

Investing.com — China’s viewpoint on tariffs remains unchanged, according to He Yadong, a spokesperson from the Ministry of Commerce.

During a briefing, he stated that tariffs would not be beneficial to anyone, including the United States.

The commerce ministry has been in communication with relevant US departments.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.

MOSCOW (Reuters) – The Russian economy has shown resilience during the three years of war in Ukraine and Western sanctions. However, as the war approaches its fourth year, the economy faces major challenges with key economic policymakers at odds on how to address them.

Economists describe the outlook for 2025 as an “ideal storm” with multiple negative factors simultaneously at play.

“After several years of very strong dynamics, the economy may disappoint in 2025,” said Dmitry Polevoy from Astra asset managers.

The economic woes add to Russian President Vladimir Putin’s case for talks with U.S. President Donald Trump on ending the war in Ukraine. Trump said on Jan. 21 that Putin was “destroying Russia” and pointed out to high inflation.

“Russia is interested in reaching a diplomatic resolution to the conflict in Ukraine based on economic considerations,” said former deputy governor of the central bank Oleg Vyugin.

Below are the five key challenges for the Russian economy in 2025:

INFLATION

Russian annual inflation reached 9.5% in 2024, driven by high military and national security spending, which is set to account for 41% of total state budget spending in 2025, state subsidies on loans, and spiralling wage growth amid labour shortages.

Over the last 15 years, inflation has only been higher in 2022, the first year of Russia’s invasion, and during the economic crisis of 2014-15 that followed the annexation of Crimea.

Inflation tops the list of economic woes in public opinion polls, with prices for staple foods such as butter, eggs, and vegetables showing double-digit growth last year.

It is impacting the incomes of the most vulnerable groups, with real pensions falling by 0.7% from January to November 2024.

The central bank is combating inflation by raising interest rates.

President Putin has said the interest rate should not be the sole method to combat inflation and has called on the government to ensure a stable supply of goods and services to limit price growth.

HIGH INTEREST RATES

The Russian central bank raised interest rates to 21% in October, the highest level since the early years of Putin’s rule, when Russia was dealing with the chaos following the collapse of the USSR.

Critics argue that high rates hurt civilian sectors of the economy, while the heavily subsidized defence sector remains immune. Prominent business leaders say that with the current cost of capital at around 30% and profitability margins at no more than 20% across most sectors, investment has come to a halt.

High rates are increasing the risks of corporate bankruptcies, especially in vulnerable sectors such as real estate, which has been hit by measures to slow lending, including a stop to state home loan subsidies.

ECONOMIC SLOWDOWN

The government projects that economic growth rates will slow to 2.5% in 2025 from around 4% in 2024 as a result of measures to cool down the overheated economy, while the International Monetary Fund (IMF) projects growth at 1.4% this year.

The pro-government economic think tank TsMAKP estimated that many industrial sectors outside defence have been stagnating since 2023, raising prospects of stagflation, a combination of high inflation and economic stagnation.

The situation is exacerbated by acute labour shortages, which emerged as a result of hundreds of thousands of Russian men joining the army or fleeing the country, becoming a major bottleneck for economic growth.

Economists warn that continued injection of money into defence-related sectors at current rates is creating imbalances in the economy and could end with recession and bankruptcies.

BUDGET DEFICIT

Russia’s budget deficit reached 1.7% of GDP in 2024, while the country’s National Wealth Fund, the main source of financing the deficit, has been depleted by two-thirds during three years of war.

The government raised taxes to bring the deficit down to 0.5% of GDP in 2025, but its revenues could also fall due to the latest U.S. energy sanctions, which targeted Russia’s oil and gas sector.

Some economists believe that the government will have no choice but to raise taxes further if military spending remains at the same level.

ROUBLE VOLATILITY

The rouble fell to its lowest level since March 2022 on January 2, following months of volatility linked to the impact of Western sanctions, which hindered Russia’s international transactions and disrupted foreign currency inflows.

Although a weaker rouble is helping the government narrow the budget deficit, it is set to fuel inflation further in the medium term, increasing the cost of imported goods.

Russia’s forex market has been transformed by sanctions, with China’s yuan becoming the most traded foreign currency, while trade in dollars and euros has moved to the opaque over-the-counter market.

By Jamie McGeever

ORLANDO, Florida (Reuters) -After two years of significant underperformance by bonds, investors may have a hard time swallowing claims that 2025 will be the “year of the bond”. But there are compelling reasons to believe this will be a case of third time lucky.

    Fixed income assets, particularly U.S. Treasuries and other government bonds, have struggled to recover from the historic pounding they took in 2022, when central banks hiked interest rates to quell the burst of inflation that followed the pandemic and Russia’s invasion of Ukraine.

    The last time Treasuries posted double-digit annual gains was 2008, when the ICE BofA U.S. Government Bond Index returned 14%. Treasuries eked out modest gains in 2023 and 2024, and corporate bonds performed notably better, but both trailed the S&P 500’s sizzling 24% and 23% gains by a wide margin.

    Wall Street has survived – and indeed thrived – despite elevated borrowing costs, thanks to resilient U.S. growth and the AI boom. But bonds have badly lagged, creating a narrative that they are a poor investment when interest rates are high.

    This narrative has gained acolytes as U.S. debt and deficit dynamics have deteriorated. Washington’s interest payments, borrowing and spending are all elevated, and many investors are skeptical the Trump administration will get public finances in order.

    Little wonder then that the ‘term premium’ is the highest in a decade. That’s the compensation investors build into the 10-year Treasury yield for taking the risk of lending to Uncle Sam over the long term rather than rolling over short-term loans.

    This is why Treasuries are no longer a natural hedge against a potential equity selloff. Or so the narrative goes.

HIGH YIELDS? NO PROBLEM

    Chris Iggo, chair of the AXA IM Investment Institute, disagrees. A look back at the past 40 years suggests bond yields at current levels are associated with positive total returns over the following 12 months. Iggo notes that the Bloomberg Aggregate U.S. Government Bond Index has delivered positive monthly total returns 90% of the time since 1985 when the yield on the index has been 4.6% or higher.

    Some recent history supports this view. The cost of credit in the decade before the Global Financial Crisis was notably higher – the 10-year yield mostly fluctuated in a 4-7% range, and real yields and the term premium were consistently more elevated than they are today.

    Yet the ICE BofA U.S. Government Bond Index doubled in value and delivered positive returns in all but one of these years. The S&P 500 index also doubled but had to ride out three straight years of double-digit annual losses, during which time it halved in value.

    The post-GFC, bond-friendly era of zero interest rates may be over, but that does not mean bond investors should be fearful. Liquidity is ample, default risk is low, investors can earn attractive income, and demand is high – look at the record demand at French and Spanish debt sales this week.

    COMPELLING

    Capital flows show investors still believe in bonds. U.S. bond funds drew record inflows of $435 billion last year, according to TD Securities. That trend could certainly continue this year, given the strength of global demand for U.S. fixed income, juicy yields and the strong probability that the U.S. economy will continue to enjoy a soft landing.

    What’s more, bonds appear cheap by many measures. Analysts at Citi calculate that the selloff in U.S. Treasuries over the last month is in the 85th percentile going all the way back to 2000.

    This is especially true in relation to equities. The ‘equity risk premium’ – the earnings yield on the S&P 500 minus the 10-year Treasury yield – is the lowest in a quarter of a century and negative in certain cases.

    Even in the investment grade corporate bond market, where spreads are historically tight, it’s a similar picture. Angel Oak Capital Advisors estimate that the S&P 500 earnings yield is almost two percentage points below the average return for the Bloomberg U.S. Corporate Investment Grade Index, the biggest gap in decades.

    Investors burned over the last two years may be suspicious of yet another bond bull call – for valid reasons, namely inflation, the public finances and uncertainty surrounding many of the Trump administration’s proposed policies. But the third time truly could be the charm.

(The opinions expressed here are those of the author, a columnist for Reuters.)

(By Jamie McGeeverEditing by Christina Fincher)

By Vuyani Ndaba

JOHANNESBURG (Reuters) – The South African Reserve Bank will trim its repo rate next week by a quarter of a percentage point to 7.50% and repeat that in March, but then delay its final 25 basis point cut of the cycle to the third quarter, a Reuters poll forecast on Thursday.

As U.S. President Donald Trump’s new administration settles into office, South Africa’s Reserve Bank was expected to ease interest rates gently this year as it awaits clarification on his proposed tariffs and other policies.

All 19 economists surveyed in the past week were unanimous in saying the SARB would cut its repo rate by 25 basis points to 7.50% on Jan. 30.

A slim majority in the poll said the central bank would cut by another 25 bps to 7.25% in March.

Median forecasts showed the bank would wait until the third quarter to cut again by 25 bps, its last expected move this year and through 2027. In a December survey, a third cut was expected in May.

Johannes Khosa, economist at the Nedbank Group Economic Unit, was one of the economists who expected only two 25 bps cuts this year to put the repo rate at 7.25% by end-2025.

“We believe Trump’s policies, if implemented, will be inflationary. This will cause inflation to be sticky and cause the U.S. Fed to reduce rates slower or even stop cutting. The SARB will have to follow suit, scaling down the cuts in order to maintain the interest rate differential,” Khosa said.

The rand weakened on Monday, after Trump announced a flurry of policy changes following his inauguration.

On Tuesday, he vowed to hit the European Union with tariffs and said his administration was discussing a 10% punitive duty on Chinese imports.

The U.S. Federal Reserve is due to meet next week and is expected to hold its benchmark rate steady as it also keeps an eye on Trump’s administration and challenges from its own bond market.

Inflation in South Africa rose for the second month in a row in December, yet at 3.0% year-on-year it was still below the mid-point of the Reserve Bank’s 3%-6% comfort level. The poll suggested it would average 4.1% this year and quicken to 4.5% next year.

The South African economy was expected to grow 1.7% this year and 1.9% next.

“We think there’s enough evidence to suggest the improvements seen in the macroeconomic backdrop will continue this year,” said David Omojomolo, Africa analyst at Capital Economics.

“The effects of load-shedding and logistics constraints should continue to fade, while the agriculture sector, which was a big factor behind the GDP contraction in Q3, should soon rebound,” said Omojomolo.

In this poll, Capital Economics was joint most bullish on growth, forecasting 2.3% for South Africa this year.

(Other stories from the Reuters global economic poll)