In the loop 07 November 2025

In the loop

Shireen Darmalingam

What you should know this morning:

The rand is weaker this morning, at R17.38/$, after closing stronger yesterday (R17.36/$*).
EM currencies were mixed yesterday; the COP (+1.3%), HUF (+0.7%) and PLN (+0.6%) were the biggest gainers; the KRW (-0.6%), PHP (-0.2%) and MXN (-0.2%) were the biggest losers.
Asian equity markets the Nikkei, Hang Seng and Shanghai Composite are down.

China’s exports fell in October for the first time since February this year, declining 1.1% y/y, following a 8.3% y/y increase in September.
Tensions with the US over trade escalated in October, before a deal was reached later in the month.
Exports to the US plunged by just over 25% in October, while shipments to other markets rose by 3.1% y/y.
Imports increased by 1.0% y/y in October, after having increased by7.4% y/y in September.

ECB Governing Council member Boris Vujcic said yesterday that monetary policy in the region is currently “in a good place”.
He added that the ECB had successfully brought inflation down to target.
Vujcic also highlighted several risks to the Eurozone economy, including fiscal discipline concerns and signs of overvaluation in financial markets.

Cleveland Fed President Beth Hammack said yesterday that monetary policy should continue to apply downward pressure on inflation.
Hammack described inflation as still too high.
She does not expect inflation to reach the Fed’s 2% target until a year or two after 2026 — and argued that interest rates should remain mildly restrictive, for now.
Hammack added that the labour market remains generally healthy despite some signs of softening.
She expects economic growth to strengthen next year, which could place downward pressure on the unemployment rate.

Fed Governor Michael Barr commented that policymakers still have work to do to bring inflation back to the 2% target.
He emphasised the need for the Fed to ensure the labour market remains solid.
Barr added that the US economy is currently operating at two speeds.
Most wealthier households are doing well, while many lower-income families continue to struggle.
Barr also warned that labour market disruptions from the rise of artificial intelligence may already be starting to appear in employment data.

Chicago Fed President Austan Goolsbee said yesterday that the lack of inflation data during the US government shutdown makes him more cautious about continuing to cut interest rates.
He noted that, unlike the labour market, there are fewer private sector data sources available to track inflation.
This has led to policymakers having no clear picture of price trends during the government shutdown.
Goolsbee expressed concern about the increase in core services inflation, saying it suggests that price pressures remain persistent, even in sectors not directly affected by tariffs.

The US government shutdown, now in its fifth week, continues to delay the release of key official data, including the non-farm payrolls data October, initially scheduled for release today.
The US University of Michigan’s consumer sentiment index, due today, is expected to have slipped to 53.2 in November, from 53.6 in October.
The 1 yr inflation expectations are expected to come in unchanged, at 4.6% in November, while the 5-10 yr inflation expectation is expected to have slipped to 3.8% in November, from 3.9% in October.

Locally, the SARB’s gross and net reserves for October are scheduled for release today.
Gross reserves were $69.74bn in September, and net reserves $67.87bn.

Brent crude oil is currently at $63.68/bbl; ($63.38/bbl*).
Gold is at $3995/oz ($3977/oz*).
SA CDS 154bps*, Brazil 144bps* and Turkey 244bps*.
Yields: US 10yr at 4.08%*, German bund at 2.65%*, SA 10-year generic at 8.87%*, SA’s R2035 at 8.75%*.

* Denotes yesterday’s close.

Key events and data:

08h00: SA gross and net reserves (October)
17h00: US University of Michigan sentiment, 1 yr and 5-10 yr inflation expectations (November)

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