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In the loop 11 April 2025

In the loop

Shireen Darmalingam

What you should know this morning:

  • The rand is stronger this morning, at R19.38/$, after closing stronger yesterday (R19.57/$*).
  • EM currencies were mixed yesterday; the PLN (+2.1%), CZK (+2.0%) and HUF (+1.9%) were the biggest gainers; the BRL (-1.0%), PEN (-1.0%) and CLP (-0.7%) were the biggest losers.
  • Asian equity markets are mixed; the Nikkei is down, while the Hang Seng and Shanghai Composite are up.
 
  • BOE Deputy Governor Sarah Breeden yesterday noted that the impact of tariffs imposed by the Trump administration on inflation is not clear cut.
  • Breeden added that the supply chain disruptions could also push inflation higher.
  • She noted that these tariffs could lower UK economic growth.
 
  • The UK monthly GDP data for February will likely show economic growth increasing only slightly.
  • Real GDP growth is expected to come in at 0.1% m/m in February, after having declined by 0.1% m/m in January.
  • Manufacturing production for February is also due out today and is expected to have increased by 0.2% m/m, following a 1.1% m/m decline in January.
  • The trade deficit is likely to have compressed slightly to £17.2bn in February, from £17.8bn in January.
 
  • President Trump yesterday indicated that his tariffs may cause “transition problems”.
  • He nonetheless expressed confidence in his trade plans. 
  • He is confident that China would eventually come to the table. 
  • President Trump also commented that US tariffs on China has now effectively risen to 145%, since the 20% fentanyl-related tariff comes on top of the other announced tariffs.
  • He remarked that the is willing to exercise flexibility on exemptions for some countries from the tariff regime, including on the 10% floor that he had imposed for all trading partners of the US. 
  • President Trump emphasized that he would not hesitate to reimpose the reciprocal tariffs if satisfactory deals weren’t struck over the next three months.
 
  • Chicago Fed President Austan Goolsbee indicated that US trade policy uncertainty has made it challenging to know how the US economy will fare and how the Fed should adjust monetary policy. 
  • Goolsbee nonetheless added that interest rate cuts remain possible.
  • He noted that “the current state of economic data looks pretty good, but the lag on when the data is reported could mean it does not reflect the current situation”.
 
  • The University of Michigan sentiment index for April is due out today.
  • The sentiment index is likely to have deteriorated to 53.5 in April, from 57.0 in March.
  • Consumer sentiment is likely to have been impacted by the reciprocal tariffs announced on 2 April.
  • The implementation of these tariffs has subsequently been delayed for 90 days.
  • Both the 1 yr and 5-10 yr inflation expectations are expected to have increased in April, to 5.2% and 4.3%, from 5.0% and 4.1%, respectively.
 
  • Locally, it’s a quiet day as far as data releases are concerned.
 
  • Brent crude is up this morning, and down by 15.0% year-to-date.
  • The gold price is up this morning, and up by 22.6% year-to-date.
 
  • Brent crude oil is currently at $63.43/bbl; ($63.33/bbl*).
  • Gold is at $3217/oz ($3158/oz*).
  • SA CDS 251bps*, Brazil 196bps* and Turkey 340bps*.
  • Yields: US 10yr at 4.42%*, German bund at 2.58%*, SA 10-year generic at 10.93%*, SA’s R2035 at 10.91%*.
 

* Denotes yesterday’s close.

Key events and data:

  • 08h00: UK monthly GDP (February), industrial production (February), manufacturing production (February), trade balance (February)
  • 14h30: US PPI (March)
  • 16h00: University of Michigan sentiment, 1 yr and 5-10 yr inflation expectations (April)
 

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