In the loop

What you should know this morning:

• The rand is stronger, at R17.58/$, after closing weaker yesterday (R17.64/$*).
• EM currencies were mixed yesterday; the CLP (-1.3%), MXN (-1.0%) and PLN (-0.9%) were the biggest losers; the ARS (+1.1%), IDR (+0.5%) and HKD (+0.2%) were the biggest gainers.
• Asian equity markets are mixed this morning; the Nikkei and Shanghai Composite are up, while the Hang Seng is down.

• GDP growth in Japan came in stronger than expected for Q2:25, with Q1:25 data also upwardly revised.
• The economy expanded by 1.0% q/q (annualised) in Q2:25, up from 0.6% q/q in Q1:25 (revised from -0.2% q/q in previous estimates).
• The improvement was on the back of solid domestic demand.
• Private consumption edged a further 0.2% q/q higher in Q2:25, matching Q1:25’s household consumption growth.
• Business investment rose 1.3% q/q in Q2:25, after growth of 1.0% q/q in Q1:25.
• Final industrial production data for June was revised higher, to 2.1% m/m growth, from 1.7% m/m estimated earlier, after remaining flat in m/m terms in May.
• Stronger-than-expected resilience in the economy might encourage the BOJ to hike rates again later this year.

• China’s growth momentum showed signs of waning in July, with weaker-than-expected industrial production and retail sales.
• Industrial production rose at the slowest pace since November, expanding 5.7% y/y in July, down from 6.8% y/y in June.
• While the trade war likely continues to weigh on mining and factory output, industrial activity also suffered extreme weather disruptions in July.
• Retail sales grew 3.7% y/y in July, the least this year, down from 4.8% y/y in June.
• The surveyed unemployment rate increased to 5.2% in July, after 5.0% in June.
• The contraction in the real estate sector deepened, with year-to-date property investment down 12.0% in July, from 11.2% in June.
• New and used home prices dipped 0.3% m/m and 0.6% m/m respectively in July, in line with the declines in June.
• Expansion in fixed-asset investment decelerated to 1.6% y/y in the first seven months of the year, down from 2.8% y/y in the first six months.

• The US will release a slew of data for July this afternoon.
• Retail sales is expected to have increased 0.6% m/m in July, matching June’s figure.
• Industrial production likely remained flat in July, following June’s 0.3% m/m increase.
• The import price index for July is also due out; prices are expected to have risen 0.1% m/m, in line with the increase in June.
• The University of Michigan will release its sentiment and inflation expectations survey data for August today.
• Sentiment likely improved somewhat in August, based on improved expectations for future conditions.

• President Trump and Russia’s Vladimir Putin will meet in Alaska today; Trump hopes to broker a settlement for the war in Ukraine.
• Trump has sought to lower the stakes for today’s meeting, mentioning that he was simply seeking to “set the table”.
• A follow-up meeting with Putin would then include President Zelenskyy and possibly other European leaders.

• Locally, there are no major data releases scheduled for today.

• Brent crude is down this morning, and down by 10.7% year-to-date.
• The gold price is up this morning, and up by 27.4% year-to-date.

• Brent crude oil is currently at $66.63/bbl; ($66.84/bbl*).
• Gold is at $3344/oz ($3335/oz*).
• SA CDS 173bps*, Brazil 137bps* and Turkey 267bps*.
• Yields: US 10yr at 4.28%*, German bund at 2.71%*, SA 10-year generic at 9.68%*, SA’s R2035 at 9.59%*.

* Denotes yesterday’s close.

Key events and data:

• 14h30: US retail sales (July), import price index (July), Empire manufacturing (August)
• 15h15: US industrial production, capacity utilisation (July)
• 16h00: US University of Michigan sentiment, inflation expectations (August)

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