In the loop 21 October 2025

In the loop

Shireen Darmalingam

What you should know this morning:

The rand is unchanged this morning, at R17.24/$, after closing stronger yesterday (R17.24/$*).
EM currencies were mixed yesterday; the ZAR (+0.7%), CLP (+0.7%) and BRL (+0.7%) were the biggest gainers; the COP (-1.4%), ARS (-1.0%) and MXN (-0.2%) were the biggest losers.
Asian equity markets are the Nikkei, Hang Seng and Shanghai Composite are up.

Japan’s Sanae Takaichi has won the key vote in the lower house of parliament to become Japan’s first female prime minister.
Takaichia yesterday struck a last-minute deal to form a new coalition government.
Takaichi pledged to “strengthen Japan’s economy and reshape the nation to take responsibility for future generations”.
She is expected to formally assume office as prime minister later today.

ECB Governing Council member Isabel Schnabel commented yesterday that the international role of the euro should be enhanced.
She noted that “for sovereignty, we need a strong currency, and this is our responsibility here at the ECB”.
Schnabel reiterated that innovation, growth, integration and defence all are “the basis for a strong euro in the international sphere”.
She remarked that international role of the euro would also be supported by a large and liquid European bond market.

ECB Governing Council member Joachim Nagel yesterday cautioned that undermining public trust in statistics and central banks could have damaging economic consequences.
He stressed that independent and reliable statistics are “crucial, especially for central banks,” describing them as “the backbone of sound monetary policy”.
Nagel noted that this principle has recently come under pressure, as some policymakers have begun questioning the reliability of key economic data that conflict with their government’s narrative.
Nagel cautioned against monetary policy decisions guided by “political convenience” instead of thorough economic analysis.
Several ECB policymakers are due to speak on the region’s economy and monetary policy today.

US President Trump stated yesterday that the US commands “great respect” from Beijing and expressed confidence in reaching a “fantastic deal” with Chinese President Xi Jinping during their upcoming meeting.
Trump noted that “Beijing threatened us with rare earths, and I responded with tariffs”.
However, he emphasised that his strong relationship with President Xi would help ensure a “very fair deal”.
White House economic adviser Kevin Hassett said yesterday that the US government shutdown is likely to end this week.

Locally, the SARB’s leading indicator for August is due out today; the index increased to 113.7 in July.
The largest positive contributors in July were an acceleration in the six-month smoothed growth rate in the real M1 money supply and an increase in SA’s USD-denominated export commodity price index.
The largest negative contributors were a narrowing of the interest rate spread and a deceleration in the six-month smoothed growth rate in the number for new passenger vehicles sold.

Oil prices fell on Monday as investors weighed a potential global glut.
US-China trade tensions added to concerns about an economic slowdown and weaker energy demand.
Brent crude is down this morning, and down by 18.5% year-to-date.
The gold price is down this morning, and up by 65.2% year-to-date.

Brent crude oil is currently at $60.83/bbl; ($61.01/bbl*).
Gold is at $4334/oz ($4356/oz*).
SA CDS 165bps*, Brazil 144bps* and Turkey 269bps*.
Yields: US 10yr at 3.98%*, German bund at 2.57%*, SA 10-year generic at 9.03%*, SA’s R2035 at 8.91%*.

* Denotes yesterday’s close.

Key events and data:

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