In the loop 26 August 2025

In the loop

Shireen Darmalingam

What you should know this morning:

The rand is stronger this morning, at R17.60/$, after closing weaker yesterday (R17.61/$*).
EM currencies were mixed yesterday; the THB (+0.6%), IDR (+0.6%) and TWD (+0.5%) were the biggest gainers; the ARS (-2.6%), ZAR (-0.9%) and HUF (-0.6%) were the biggest losers.
Asian equity markets are mixed this morning; the Nikkei and Hang Seng are down, while the Shanghai Composite is up.

ECB President Christine Lagarde yesterday commented that the region can handle higher tariffs, noting that it is unlikely that higher tariffs will derail the Eurozone economy.
Lagarde added that once there is certainty about the tariffs, businesses will deal with it.
Lagarde remarked that higher tariffs will only have “a small impact” on GDP.
Lagarde’s comments support the idea that the US-EU trade deal is not causing significant concern among policymakers.
The ECB held its benchmark interest rate unchanged at the July policy meeting and is expected to keep rates unchanged at the September policy meeting too.

Fed Chair Jerome Powell last week signalled that the Fed could cut rates at the Next FOMC meeting in September.
The Fed Chair signalled at Jackson Hole that growing risks from high borrowing costs will damage the jobs market.
However, monetary policy changes will continue to hinge on all incoming economic data ahead of the FOMC meeting.
Investors will keep a close eye on upcoming data on inflation and the labour market, which could derail plans for a rate cut in September.

President Trump yesterday indicated that he had “sufficient cause” to fire Fed Governor Lisa Cook.
This follows allegations that Cook made false statements on one or more mortgage loans.
Trump noted that Americans must be able to have full confidence in the honesty of policymakers.
He added that, in light of the allegations, he does not have confidence in Cook’s integrity.

The S&P CoreLogic house price index for June is scheduled for release today; home prices likely decelerated further in June.
The FHFA house price index for June is also on the cards today; the house price index is expected to have declined for a third consecutive month.
The Conference Board consumer confidence for August is due out today; consumer confidence likely deteriorated in August.
Consumer confidence is likely to have slipped to 96.4 in August, from 97.2 in July.

Locally, the SARB’s leading indicator for June is due out today; the index fell to 111.3 in May.

Brent crude oil is currently at $68.51/bbl; ($68.80/bbl*).
Gold is at $3373/oz ($3365/oz*).
SA CDS 173bps*, Brazil 140bps* and Turkey 264bps*.
Yields: US 10yr at 4.27%*, German bund at 2.75%*, SA 10-year generic at 9.65%*, SA’s R2035 at 9.56%*.

* Denotes yesterday’s close.

Key events and data:

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