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In the loop 15 April 2025

In the loop

Shireen Darmalingam

What you should know this morning:

  • The rand is stronger this morning, at R18.83/$, after closing stronger yesterday (R18.85/$*).
  • EM currencies were mixed yesterday; the ZAR (+1.7%), RUB (+1.4%) and MXN (+1.2%) were the biggest gainers; the ARS (-10.2%), COP (-0.5%) and HUF (-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.
 
  • The German ZEW expectations survey for April may have fallen significantly on the back of tariff concerns.
  • The sentiment index is expected to have decreased to 10.0 in April, from 51.6 in March.
  • The short-term outlook remains dominated by the risk of US tariffs on European exports.
  • The Eurozone ZEW survey expectations index came in higher, at 39.8, in March.
  • The ECB’s bank lending survey is also scheduled for release today.
  • The survey is expected to show that lending conditions continued to stabilise, after having improved noticeably over the last two years.
 
  • The UK labour data for the three months to February is also on the cards.
  • The unemployment rate is likely to have remained unchanged, at 4.4%, in February.
  • A low response rate to the Labour Force Survey continues to distort the survey results.
 
  • President Trump yesterday suggested that he would grant a temporary reprieve to auto-related tariffs that are already in place.
  • He was considering a reprieve the 25% tariffs imposed on foreign auto parts imports from Mexico, Canada, and other countries.
  • Exemptions are also being discussed for various sectors.
 
  • Fed Governor Christopher Waller commented yesterday that the trade-driven inflation impact is likely to be temporary.
  • Waller highlighted two scenarios for how President Trump’s 's trade policy could impact the US economy.
  • The “large tariff” scenario sees economic growth slowing, unemployment rising, and inflation peaking near 5%, before moderating in 2026.
  • The "smaller tariff" scenario sees the impact on inflation as smaller. Here, inflation may peak around 3%.
  • He noted that the tariff policy is “one of the biggest shocks to affect the US economy in many decades”.
  • Atlanta Fed President Raphael Bostic said that policymakers need to wait for further clarity on President Trump’s policies before adjusting interest rates.
 
  • The Fed Bank of New York survey showed that US consumer inflation expectations (one-year ahead) increased to 3.58% in March, from 3.1% in February.
  • The survey noted that consumers are now more anxious about job prospects.
  • Nearly one third of households expect to be in a worse financial position in a year.
  • The US Empire manufacturing survey for April is due out today; consumer sentiment is expected to have improved.
  • The index is likely to have improved to -13.5 in April, from -20.0 in March.
  • Looking ahead, however, trade policy uncertainty is expected to continue to weigh on activity in the industry.
 
  • Locally, mining production for February is due out today, and likely declined by 2.7% y/y in January.
  • Mining production declined by 1.2% m/m in January.
 
  • Brent crude is up this morning, and down by 12.7% year-to-date.
  • The gold price is up this morning, and up by 22.9% year-to-date.
 
  • Brent crude oil is currently at $65.17/bbl; ($64.88/bbl*).
  • Gold is at $3225/oz ($3207/oz*).
  • SA CDS 260bps*, Brazil 191bps* and Turkey 353bps*.
  • Yields: US 10yr at 4.34%*, German bund at 2.51%*, SA 10-year generic at 10.95%*, SA’s R2035 at 10.93%*.
 

* Denotes yesterday’s close.

Key events and data: 

  • 08h00: UK ILO unemployment rate (February)
  • 10h00: Eurozone ECB bank lending survey
  • 11h00: Germany ZEW survey expectations (April), industrial production (February)
  • 11h30: SA mining production (February)
  • 14h30: US Empire manufacturing (April)
 

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