In the loop 01 April 2025

In the loop

Shireen Darmalingam

What you should know this morning:

The rand is stronger this morning, at R18.33/$, after closing stronger yesterday (R18.36/$*).
EM currencies were mixed yesterday; the RUB (+2.3%), BRL (+1.0%) and COP (+0.5%) were the biggest gainers; the PEN (-0.5%), HUF (-0.3%) and MXN (-0.3%) were the biggest losers.
Asian equity markets the Nikkei, Hang Seng and Shanghai composite are up.

China’s Caixin manufacturing PMI for March increased to 51.2, from 50.8 in February.
This improvement was driven by increased supply and demand, employment and production, and continued export growth.

Eurozone inflationary pressures will likely have receded further in March after the recent uptick at the beginning of the year.
Headline CPI for March is likely to come in at 2.2% y/y, from 2.3% y/y in February.
Core CPI is expected 2.5% y/y in March, from 2.6% y/y in February.
The ECB will keep on eye on progress on prices ahead of its policy meeting later this month.
Several ECB policymakers recently signalled their indecisiveness about whether to pause or cut at the April policy meeting.
The UK Nationwide house price index for March is scheduled for release today.
The house price index is likely to have increased by 4.2% y/y in March, after having increased by 3.9% y/y in February.
Buyers are likely to have brought purchases forward to avoid higher property taxes.

The US Job Openings and Labour Turnover Survey (JOLTS) job openings for February, scheduled for release today, are likely to have slipped to 7.655 million, from 7.740 million in January.
The data comes ahead of the non-farm payrolls (NFP) for March, due on Friday.
NFP likely increased by 140k in March, from 151k in February.
The US ISM manufacturing index for March is due out today; a decrease to 49.5 in February is expected, from 50.3 in January.

Investors are keeping a close eye on the expected announcement by US President Donald Trump regarding reciprocal tariffs scheduled for tomorrow.
New York Fed President John Williams noted yesterday that there is a risk of higher inflation this year on the back of trade uncertainty.
He noted however that his baseline view is that inflation will remain relatively stable.
Richmond Fed President Tom Barkin indicated that the Fed would need to have confidence that inflation would move down before cutting rates again.

Locally, the BER manufacturing PMI for March is due for release today; the index fell to 44.7 in February, from 45.3 in January.
The March Naamsa vehicle sales are also due today; vehicle sales increased by 7.3% y/y in February.

Negotiations between the DA and the ANC will likely continue for today.
The two parties signalled progress in their efforts to resolve an impasse over the nation’s budget.
President Cyril Ramaphosa commented yesterday that he is confident that the GNU can develop a “shared approach to unlock inclusive growth, job creation and a secure fiscal future”.

Brent crude oil is currently at $74.96/bbl; ($74.74/bbl*).
Gold is at $3143/oz ($3117/oz*).
SA CDS 229bps*, Brazil 190bps* and Turkey 319bps*.
Yields: US 10yr at 4.20%*, German bund at 2.73%*, SA 10-year generic at 10.62%*, SA’s R2035 at 10.60%*.

* Denotes yesterday’s close.

Key events and data:

08h00: UK Nationwide house prices (March)
10h00: Eurozone HCOB manufacturing PMI (March – final)
10h30: UK S&P Global manufacturing PMI (March – final)
11h00: Eurozone CPI (March), unemployment rate (February)
11h00: SA manufacturing PMI (March)
16h00: US JOLTS job openings (February), S&P Global manufacturing PMI (March – final), ISM manufacturing (March)
SA Naamsa vehicle sales (March)

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