In the loop 03 October 2025

In the loop

Christelle Grobler

What you should know this morning:

The rand is trading at R17.30/$ this morning, after closing weaker yesterday (R17.31/$*).
EM currencies were mixed yesterday; the MXN (-0.6%), ZAR (-0.5%) and RUB (-0.3%) were the biggest losers; the PEN (+0.5%), IDR (+0.1%) and TWD (+0.1%) were the biggest gainers.
Asian equity markets are mixed; the Nikkei and Shanghai Composite are up, while the Hang Seng is down.

US government shutdown tracker: the federal government shutdown is in its third day.
President Trump has said that his administration will use this opportunity to perhaps permanently cut certain US agencies.
Democrats are accusing Trump of using the shutdown as cover for long-standing plans to reduce the size of government as well as to punish political opponents.
The longer the shutdown, the greater the risk that the Fed will not have the September CPI inflation report before its next meeting in late October.
The September non-farms payrolls report, which was due today, can reportedly be published very quickly once the BLS reopens.
In 2013, when the US had a 16-day federal shutdown, the BLS published the delayed jobs report three business days after reopening.
However, the CPI report would face a longer delay; the BLS published the CPI with a delay of almost two weeks after the reopening in 2013.

Dallas Fed President Lorie Logan has indicated that she is unlikely to support another interest rate cut at the Fed’s next meeting.
“I’m seeing that inflation is running above our 2% current target”, Logan said; she added that she expects tariffs to lead to higher inflation in the coming months.
Therefore, Logan noted that her “forecast has a little bit slower of a normalisation of the policy path in order to make sure we get all the way to 2%”.
She acknowledged risks to the employment outlook, but argued that the labour market seems “fairly balanced”.

Japan’s jobless rate ticked up more than expected in August.
The rate rose to 2.6%, from 2.3% in July, the highest in over a year.
The job-to-applicant ratio dipped to 1.20 in August, from 1.22 in July; while this still signals an ongoing labour shortage, this is the lowest ratio of job openings since 2022.
In a speech earlier today, BOJ Governor Kazuo Ueda was careful to avoid signalling when further monetary policy normalisation may see another rate hike.
“If the baseline scenario for economic activity and prices outlined so far is realised, the bank, in accordance with improvement in economic activity and prices, will continue to raise the policy interest rate”, Ueda said.
Ueda noted that the BOJ will monitor wage and price trends, including food inflation, as well as the impact of US tariffs on Japan’s corporate profits.
The BOJ’s next policy meeting will be on 30 October.

Eurozone PPI inflation for September will be released today.
The PPI rose 0.4% m/m in August, resulting in a 0.2% y/y increase.
Earlier this week, Eurozone CPI for September came in higher, at 2.2% y/y, from 2.0% y/y in August.
Higher services prices as well as energy base effects drove the CPI higher in September.
The policy rate is likely to remain on hold for the foreseeable future; ECB Vice President Luis de Guindos commented on Wednesday that the current level is the “correct one”.

Brent crude oil is currently at $64.58/bbl; ($64.11/bbl*).
Gold is at $3857/oz ($3857/oz*).
SA CDS 164bps*, Brazil 135bps* and Turkey 256bps*.
Yields: US 10yr at 4.08%*, German bund at 2.70%*, SA 10-year generic at 9.28%*, SA’s R2035 at 9.17%*.

* Denotes yesterday’s close.

Key events and data:

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