In the loop 04 November 2025

In the loop

Shireen Darmalingam

What you should know this morning:

The rand is weaker this morning, at R17.35/$, after closing stronger yesterday (R17.30/$*).
EM currencies were mixed yesterday; the MXN (+0.4%), CLP (+0.4%) and BRL (+0.3%) were the biggest gainers; the ARS (-2.4%), THB (-0.4%) and TWD (-0.3%) were the biggest losers.
Asian equity markets the Nikkei, Hng Seng and Shanghai Composite are down.

Central bank watch: the Reserve Bank of Australia (RBA) kept its benchmark interest rate unchanged today, as expected.
The RBA warned of stronger inflationary pressures in the economy and reiterated that future policy decisions would continue to be guided by incoming data.
In its quarterly macroeconomic forecasts, the central bank projected core inflation as likely rising above the top of its 2–3% target range through to mid-2026.
The labour market is expected to remain broadly stable.
The latest forecasts also assume one interest rate cut in Q2:26.

The US ISM manufacturing PMI fell for an eighth consecutive month in October, to 48.7, from 49.1 in September.
The ISM reported that manufacturers remain concerned about the ongoing uncertainty surrounding trade policy under the Trump administration.
Inflationary pressures continued to ease during the month, with the prices paid index for raw materials declining to 58, its lowest level since the start of the year.
Since peaking in April, at the height of the tariff rollout, the price gauge has dropped by nearly 12 pts.
With the US government shutdown delaying the release of official data, policymakers are increasingly relying on private reports such as the ISM survey to assess economic conditions and the state of the labour market.
Friday’s scheduled non-farm payrolls (NFP) report is expected to be postponed due to the shutdown.

Chicago Fed President Austan Goolsbee said yesterday that he would want to see more data before deciding how to vote at the Fed’s December FOMC meeting.
Goolsbee cautioned that he is currently more concerned about inflation than the labour market.
He noted that inflation has been above target for four-and-a-half years, and it’s trending in the wrong direction.
Goolsbee voted in favour of a 25 bps rate cut at the Fed’s October policy meeting.

San Francisco Fed President Mary Daly said yesterday that the central bank should “keep an open mind” about the possibility of another interest rate cut at its December policy meeting.
Daly emphasised the need for the Fed to strike a balance between its dual mandate.
The central bank needs to continue putting downward pressure on inflation while also supporting the labour market to help households recover from the loss of purchasing power caused by years of high inflation.
Daly added that she supported the Fed’s decision last week to lower its benchmark rate by 25 bps for a second consecutive month, calling the move “appropriate”.
Fed Chair Jerome Powell noted last week that another rate cut in December was “not a foregone conclusion”.

Fed Governor Lisa Cook sees the risk of further labour market weakness as greater than the risk of inflation reaccelerating.
Cook expects inflation to remain elevated over the coming year, reflecting the impact of US tariffs.
She anticipates price pressures to ease towards the Fed’s 2% target once those effects fade.
Cook added that every meeting, including December’s, is a “live meeting,” underscoring that monetary policy is not on a predetermined path and that another rate cut in December is not guaranteed.

Brent crude oil is currently at $64.70/bbl; ($64.89/bbl*).
Gold is at $3981/oz ($4001/oz*).
SA CDS 149bps*, Brazil 139bps* and Turkey 244bps*.
Yields: US 10yr at 4.11%*, German bund at 2.66%*, SA 10-year generic at 8.96%*, SA’s R2035 at 8.83%*.

* Denotes yesterday’s close.

Key events and data:

Read PDF