In the loop 06 August 2025

In the loop

Shireen Darmalingam

What you should know this morning:

The rand is stronger this morning, at R17.87/$, after closing stronger yesterday (R17.88/$*).
EM currencies were mixed yesterday; the ARS (+1.5%), MXN (+0.8%) and HUF (+0.3%) were the biggest gainers; the PHP (-0.5%), RUB (-0.3%) and INR (-0.2%) were the biggest losers.
Asian equity markets the Nikkei, Hang Seng and Shanghai Composite are up.

Central bank watch: the Reserve Bank of India (RBI) today kept its benchmark interest rate unchanged, at 5.5%.
The RBI noted its steady stance as coming amid high tariff uncertainty.

President Trump yesterday indicated that US tariffs on semiconductor and pharmaceutical imports are expected to be announced “within the next week or so”.
Trump added that the US administration is preparing to target key economic sectors in its effort to reconfigure global trade.
He noted that the tariffs are likely to be small initially but may be ramped to the “maximum” of about 250% in a year-and-a-half.
He stressed that he wants pharmaceuticals to be manufactured in the US.
Trump said that the US administration has been investigating the semiconductor market since April to set the stage for potential tariffs.
Trump also suggested that he would hike tariffs on more countries buying Russian energy, including China.

The EU noted yesterday that it would suspend its retaliatory tariffs on the US — even as the specifics of a trade deal reached last month have not been signed.
President Trump last week signed an executive order that will implement a 15% tariff on most EU products.
However, it is still uncertain when the US will lower its 27.5% rate on European cars to 15%.

The US ISM services index fell in July to 50.1, against expectations for an increase, and from 50.8 in June.
The slippage came on the back of economic uncertainty and the fading impact of earlier tariff driven purchasing.
The prices paid component increased to its highest level since 2022, which may squeeze profit margins.
Employers are also likely to remain cautious about hiring and investment in the months ahead.

Eurozone retail sales for June are due out today; sales are expected to have increased by 2.6% y/y in June, following a 1.8% y/y increase in May.
On a m/m basis, retail sales are likely to have increased by 0.3% in June, after having declined by 0.7% m/m in May.

Brent crude oil is currently at $68.06/bbl; ($67.64/bbl*).
Gold is at $3371/oz ($3380/oz*).
SA CDS 188bps*, Brazil 151bps* and Turkey 279bps*.
Yields: US 10yr at 4.21%*, German bund at 2.62%*, SA 10-year generic at 9.74%*, SA’s R2035 at 9.66%*.

* Denotes yesterday’s close.

Key events and data:

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