In the loop 06 May 2025

In the loop

Shireen Darmalingam

What you should know this morning:

The rand is stronger this morning, at R18.26/$, after closing stronger yesterday (R18.29/$*).
EM currencies were mixed yesterday; the RUB (+2.9%), TWD (+2.4%) and MYR (+1.3%) were the biggest gainers; the ARS (-2.5%), COP (-1.2%) and BRL (-0.5%) were the biggest losers.
Asian equity markets the Nikkei, Hang Seng and Shanghai Composite are up.

China'sCai xin services PMI for April came in lower at 50.7, from 51.9 in March.
The composite PMI slipped to 51.1 in April, from 51.8 in March.
The data is the latest setback for the Chinese economy already under pressure from US tariffs.
The Chinese economy is at risk of a significant slowdown after it recorded a solid start to the year.

ECB Governing Council member Yannis Stournaras yesterday commented that the central bank is set to continue cutting interest rates.
Stournaras however added that the ECB would assess all incoming economic data on a meeting-to-meeting basis.
He highlighted current economic uncertainty as high, and added that, in such a situation, “you don’t take big steps or make big promises”.
Stournaras also pointed out that a slowdown of inflation is expected because of the tariffs under the Trump administration.
The central bank has cut its benchmark interest rate six times since June last year and is expected to cut again at the June policy meeting this year.

Markets are keeping a close eye on possible trade talks between the US and its trading partners following comments from President Trump that some trade deals “could very well be” announced this week.
China recently indicated that it is considering an offer to discuss Trump’s steep 145% levies.
The US trade deficit is likely to have widened to $137.2bn in March, from a deficit of $122.7bn in February.
Imports are likely to have surged in March as firms front-loaded products ahead of the tariff increases.

Locally, the industry-wide PMI for April is due out today; the index is currently below the 50pt benchmark, at 48.3.
Electricity production and consumption for March are also scheduled for release today.

The oil price fell yesterday over renewed concerns of a global supply glcut following a decision by Opec+ to announce a second consecutive monthly output increase.
Eight OPEC+ members, including Saudi Arabia and Russia, agreed to increase supply by 411,000 barrels a day in June.
The decision came despite prices sliding on the back of fears of oversupply and economic weakness due to Trump’s trade war.
Brent crude is up this morning, and down by 18.0% year-to-date.
The gold price is up this morning, and up by 27.9% year-to-date.

Brent crude oil is currently at $61.18/bbl; ($60.23/bbl*).
Gold is at $3355/oz ($3309/oz*).
SA CDS 247bps*, Brazil 183bps* and Turkey 352bps*.
Yields: US 10yr at 4.34%*, German bund at 2.51%*, SA 10-year generic at 10.64%*, SA’s R2035 at 10.60%**.

* Denotes yesterday’s close.

Key events and data:

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