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In the loop 05 May 2025

In the loop

Christelle Grobler

What you should know this morning:

  • The rand is trading at R18.36/$ this morning, after closing stronger on Friday (R18.40/$*).
  • EM currencies were mixed on Friday; the TWD (+3.8%), KRW (+1.7%) and MYR (+1.4%) were the biggest gainers; the RUB (-1.0%), TRY (-0.3%) and COP (-0.2%) were the biggest losers.
  • Asian equity markets are mixed this morning; the Nikkei and Hang Seng are up, while the Shanghai Composite is down.
 
  • Central bank watch: the US Fed FOMC will meet this week, and announce the rates decision on Wednesday.
  • Rates are expected to remain on hold; markets have lowered the number of cuts expected this year.
  • Officials are likely to have a robust discussion, weighing the risks to inflation and the economic outlook.
  • The Trump administration’s policies and conduct have created an environment of extreme uncertainty.
  • Tariffs have likely dislodged inflation expectations, which might keep the Fed cautious.
  • The BOE will decide on rates on Thursday; a cut of 25 bps is expected.
  • Several other central banks will also meet this week; cuts are anticipated in Poland and Brazil, while rates in Sweden and Norway will likely remain on hold.
 
  • Trump has expanded his trade war to the cinema industry.
  • The president announced that he is planning a tariff of 100% on films produced abroad.
  • He claims Hollywood is “devastated” by US filmmakers and studios working abroad.
 
  • The US ISM services index for April will be released today.
  • This services sector gauge stood at 50.8 in March, and is expected to come in at 50.3, remaining in expansion by a small margin.
  • The indicator for prices paid likely accelerated, from 60.9 in March, to 61.4 in April.
  • New orders as well as employment are expected to have slumped.
 
  • Locally, there are no major data releases scheduled for today.
  • Tomorrow sees the release of the S&P Global SA PMI for April; the PMI stood at 48.3 in March, signalling contraction (below 50).
  • Manufacturing production data for March will be out on Thursday.
  • Production is expected to have increased 0.4% m/m in March, up from 0.3% m/m in February.
 
  • Brent crude is down this morning, and down by 20.6% year-to-date.
  • Opec+ members announced a sharp increase in production on Saturday.
  • The additional output of 114,000 barrels a day adds to concerns of oversupply.
  • The gold price is up this morning, and up by 24.2% year-to-date.
 
  • Brent crude oil is currently at $59.27/bbl; ($61.29/bbl*).
  • Gold is at $3260/oz ($3240/oz*).
  • SA CDS 238bps*, Brazil 182bps* and Turkey 350bps*.
  • Yields: US 10yr at 4.31%*, German bund at 2.53%*, SA 10-year generic at 10.64%*, SA’s R2035 at 10.60%*.
 

* Denotes Friday’s close.

Key events and data:

  • 10h30: Eurozone Sentix investor confidence (May)
  • 15h45: US S&P Global services and composite PMI (April – final)
  • 16h00: US ISM services index (April)
 

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