In the loop 10 September 2025

In the loop

Shireen Darmalingam

What you should know this morning:

The rand is stronger this morning, at R17.51/$, after closing weaker yesterday (R17.53/$*).
EM currencies were mixed yesterday; the THB (+0.6%), TWD (+0.5%) and COP (+0.5%) were the biggest gainers; the RUB (-1.3%), IDR (-1.0%) and PHP (-0.5%) were the biggest losers.
Asian equity markets the Nikkei, Hang Seng and Shanghai Composite are up.

China’s CPI came in lower than expected in August, declining by 0.4% y/y, after having flatlined in July.
PPI was also down in August, by 2.9% y/y, after a 3.6% y/y decline in July.

The ECB’s monetary policy meeting is in focus this week; policymakers are widely expected to leave the benchmark interest rate unchanged at their decision tomorrow.
Policymakers are waiting for clearer evidence of how the economy is holding up against trade headwinds, as underlying inflation has yet to ease as much as desired.
Stronger-than-expected economic data could lead to an upward revision in the ECB’s 2025 GDP forecast.
However, the recent EU-US trade deal implies a larger tariff shock than assumed in the June projections.
Risks are thus tilted to the downside for both growth and inflation.

US Treasury Secretary Scott Bessent commented yesterday that the Fed is "choking off growth with high rates".
Bessent’s comments came after revised BLS labour data revealed significant downward revisions to employment figures.
He noted that 2024 job gains had been overstated by nearly 1 million workers, on top of the previously reported 577,000 downward revision.
According to Bessent, this brings the “Biden jobs overstatement” to roughly 1.5 million positions.
He added that President Trump had inherited an economy “far worse than initially reported”.
The downward revision implies that job growth was already losing momentum before President Trump’s new import tariffs took effect.
The Fed will meet next week and is largely expected to cut the Fed funds rate.

President Trump told EU officials that he is prepared to impose broad new tariffs on India and China in an effort to pressure Russian President Putin to negotiate with Ukraine—provided European nations take the same steps.
He emphasized that the US would match any tariffs that Europe may apply to either country.
Trump also raised additional options, including tighter sanctions on Russia’s shadow fleet of oil tankers, as well as new restrictions on its banks and leading oil companies.

A federal judge ruled yesterday that President Trump cannot dismiss Fed Governor Lisa Cook, at least for the time being.
The court issued a temporary restraining order blocking Trump’s attempt to remove her.
Trump announced in late August that he was firing Cook, citing allegations of mortgage fraud against her.

Brent crude oil is currently at $67.11/bbl; ($66.39/bbl*).
Gold is at $3645/oz ($3626/oz*).
SA CDS 167bps*, Brazil 139bps* and Turkey 273bps*.
Yields: US 10yr at 4.08%*, German bund at 2.65%*, SA 10-year generic at 9.59%*, SA’s R2035 at 9.48%*.

* Denotes yesterday’s close.

Key events and data:

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