In the loop 05 September 2025

In the loop

Shireen Darmalingam

What you should know this morning:

The rand is stronger this morning, at R17.74/$, after closing weaker yesterday (R17.78/$*).
EM currencies were mixed yesterday; the COP (+0.5%), PHP (+0.4%) and PEN (+0.2%) were the biggest gainers; the ZAR (-0.7%), RUB (-0.6%) and KRW (-0.4%) were the biggest losers.
Asian equity markets the Nikkei, Hang Seng and Shanghai Composite are up.

New York Fed President John Williams said yesterday that it will “become appropriate” to cut interest rates over time.
However, he did not specify the timing or pace of such rate cuts.
He noted that if the Fed continues to make progress toward its dual mandate objectives, as reflected in his baseline forecast, it would be appropriate to gradually move rates toward a more neutral level.
The Fed has kept rates unchanged so far this year while assessing the inflationary impact of President Trump’s tariffs.
Markets widely expect the Fed to cut the funds rate at its 17 September FOMC meeting.

President Trump has signed an order implementing the US-Japan trade deal, which sets a 15% tariff on most imports, including automobiles and auto parts.
The agreement, reached in July, also includes Japan’s pledge to establish a $550bn US investment fund.
The 15% tariff will be applied retroactively to most products shipped from 7 August onward.

The US ISM services index increased in August to 52.0, from 50.1 in July.
The increase came on the back of an acceleration in new orders, which increased to 56.0 in August, from 50.3 in July.
The business activity index increased to a 5-month high of 55.0 in August.

The US non-farm payrolls data (NFP) for August is in the spotlight today.
The NFP expected to have increased, by 75k, up from an increase of 73k in July.
The unemployment rate is likely to have increased to 4.3% in August, from 4.2% in July.
Investors will look to the NFP data to inform their views of how the Fed will approach monetary policy in the months ahead.

Locally, the SARB’s gross and net reserves for August are due out today.
Gross reserves came in at $69.16bn in July, while net reserves came in at $65.14bn in July.

Brent crude oil is currently at $66.86/bbl; ($66.99/bbl*).
Gold is at $3556/oz ($3545/oz*).
SA CDS 172bps*, Brazil 137bps* and Turkey 268bps*.
Yields: US 10yr at 4.15%*, German bund at 2.71%*, SA 10-year generic at 9.72%*, SA’s R2035 at 9.61%*.

* Denotes yesterday’s close.

Key events and data:

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