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In the loop 29 August 2025

In the loop

Shireen Darmalingam

What you should know this morning:

  • The rand is weaker this morning, at R17.71/$, after closing weaker yesterday (R17.68/$*).
  • EM currencies were mixed yesterday; the ARS (+1.2%), KRW (+0.7%) and HUF (+0.5%) were the biggest gainers; the RUB (-0.3%), HKD (-0.1%) and ZAR (-0.1%) were the biggest losers.
  • Asian equity markets are mixed this morning; Nikkei is down, while the Hang Seng and Shanghai Composite are up.
 
  • Eurozone inflation expectations 3 years ahead are likely to have remained unchanged, at 2.4%, in June.
  • Inflation expectations for 12 months ahead came in lower, at 2.6% in in June, from 2.8% in May.
 
  • The European Union announced yesterday that it has responded to a demand from President Trump by adopting draft regulations to scrap all tariffs on US industrial goods. 
  • The bloc will also grant preferential access to selected US agricultural and seafood products.
  • In exchange, the US is expected to cut tariffs on European cars and auto parts to 15%, down from 27.5%, which is expected to be applied retroactively from 1 August.
  • Cars remain one of the EU’s most valuable exports to the US; Germany alone shipped $34.9 billion worth of vehicles and parts in 2024.
  • Although the draft measures still need approval from the European Parliament and member states, the expects the US to implement the tariff reduction immediately.
 
  • Fed Governor Lisa Cook has filed a lawsuit against President Trump over his attempt to remove her from the Fed board on allegations of mortgage fraud.
  • Trump has claimed that Cook may have misrepresented information on mortgage applications to secure better rates. 
  • However, Cook’s lawyers have argued that the unproven allegations, which predate her Senate confirmation, do not constitute valid “cause” for her dismissal.
  • The lawsuit marks a significant escalation in the mounting tensions between the White House and the Fed. 
  • Trump has repeatedly attacked Fed Chair Jerome Powell, who has so far resisted President Trump’s demands to resign.
 
  • Fed Governor Christopher Waller said that he expects the Fed to lower the Fed funds rate by 25 bps at the September FOMC meeting.
  • He emphasized that, at this stage, he does not see the need for an outsized cut. 
  • Waller also signalled that further rate reductions are likely over the next three to six months.
  • Waller, who is being discussed as a potential candidate to succeed the Fed Chair next year, reiterated that a modest move in September would be appropriate, rather than a larger adjustment.
 
  • US personal income and spending data for July will be released today.
  • Personal income is expected to have risen by 0.4% m/m in July, following a 0.3% m/m increase in June.
  • Personal spending is also anticipated to have grown by 0.5% m/m in July, up from a 0.3% m/m increase in June.
  • The Fed’s preferred inflation gauge, the core PCE deflator, is forecast to have increased by 0.3% m/m in July, matching the pace recorded in June.
  • The University of Michigan sentiment index for August (final estimate) is also scheduled for release today; the sentiment index is likely to have remained unchanged, at 58.6, in August, down from 61.7 in July.
 
  • Locally, the M3 and private sector credit extension (PSCE) for July are scheduled for release today.
  • PSCE is expected to come in at 5.5% y/y in July, from 4.98% y/y in June
  • The monthly Budget balance data for July is also due out; the budget deficit came in at R48.7bn in June. 
  • The July trade balance is scheduled for release this afternoon; a trade surplus of R19.7bn is expected, from R22bn in June.
 
  • Brent crude is down this morning, and down by 8.6% year-to-date.
  • The gold price is down this morning, and up by 29.9% year-to-date.
 
  • Brent crude oil is currently at $68.24/bbl; ($68.62/bbl*).
  • Gold is at $3408/oz ($3417/oz*).
  • SA CDS 174bps*, Brazil 137bps* and Turkey 263bps*.
  • Yields: US 10yr at 4.21%*, German bund at 2.69%*, SA 10-year generic at 9.69%*, SA’s R2035 at 9.59%*.
 

* Denotes yesterday’s close.

Key events and data: 

  • 08h00: SA M3 and PSCE (July)
  • 10h00: Eurozone ECB 1 yr and 3 yr inflation expectations (July)
  • 14h00: SA trade balance (July), monthly budget balance (July)
  • 14h30: US personal income and spending (July), advance goods trade balance (July)
  • 16h00: US University of Michigan sentiment index, 1 yr and 5-10 yr inflation expectations (August – final)
 

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