In the loop 07 April 2025

In the loop

Shireen Darmalingam

What you should know this morning:

The rand is weaker this morning, at R19.19/$, after closing weaker on Friday (R19.13/$*).
EM currencies were mixed on Friday; the PHP (+0.5%), INR (+0.2%) and THB (+0.2%) were the biggest gainers; the BRL (-3.6%), CLP (-3.0%) and COP (-2.8%) were the biggest losers.
Asian equity markets the Nikkei, Hang Seng and Shanghai Composite are down.

Central bank watch: the central banks of India, New Zealand, the Philippines and Singapore are expected to ease monetary policy this week to buttress growth.
This comes as policymakers have to deal with sweeping US tariffs that will likely deal a hard blow to the global economy.

German industrial production for February, scheduled for release today, is likely to have dipped.
This is expected even before the impact of the high US tariffs on auto imports is felt.
The UK monthly GDP data for February, due out on Friday, will likely show economic growth increasing only slightly.

The meeting minutes of the Fed’s FOMC meeting (18-19 March) is scheduled for release on Wednesday.
The markets will keep a close eye on clues for when the FOMC might cut rates again.
The minutes are likely to show that the majority of FOMC policymakers were more worried about the persistence of inflation.
Fed Chair Jerome Powell commented in March that the Trump administration’s new tariffs are “significantly larger than expected,” and their inflation impact “could be more persistent”.
The US March CPI will be in focus this week (Wednesday) and is likely to come in at 2.6% y/y, from 2.8% y/y in February.
On a m/m basis, headline CPI is likely to have increased by 0.1% in March, after having increased by 0.2% in February.
The NFIB small business optimism index for March, due out tomorrow, is likely to have slipped to 99.0, from 100.7 in February.
PPI for March, out on Friday, is expected at 3.3% y/y, from 3.3% y/y in February.
The University of Michigan sentiment index for April is due out on Friday.
The sentiment index is likely to have deteriorated to 54.0 in April, from 57,0 in March.

Locally, the SARB’s gross and net reserves for March are scheduled for release today.
Gross reserves were $66.26bn in February, while net reserves were $61.73bn in February.
Manufacturing production for February is due out on Tuesday; production is expected to have declined by 3.1% y/y in February, after having fallen by 3.3% y/y in January.
On a m/m basis, manufacturing production is likely to have decreased by 0.2% in February, following a 0.2% increase in January.

The SA government has noted that it would not rush into imposing reciprocal tariffs on imports from the US as it would be ill-considered and counterproductive.
International Relations Minister Ronald Lamola commented that “SA remains committed to a mutually beneficial trade relationship with the United States”.
He added though that punitive tariffs “are a concern and serve as a barrier of trade”.

Brent crude oil is currently at $64.29/bbl; ($65.58/bbl*).
Gold is at $3042/oz ($3038/oz*).
SA CDS 273bps*, Brazil 202bps* and Turkey 344bps*.
Yields: US 10yr at 3.93%*, German bund at 2.57%*, SA 10-year generic at 11.11%*, SA’s R2035 at 11.09%*.

* Denotes Friday's close.

Key events and data:

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