In the loop 16 July 2025

In the loop

Shireen Darmalingam

What you should know this morning:

The rand is stronger this morning, at R17.89/$, after closing weaker yesterday (R17.93/$*).
EM currencies were mixed yesterday; the ARS (+1.4%), BRL (+0.6%) and ZAR (+0.3%) were the biggest gainers; the PLN (-0.8%), HUF (-0.8%) and MXN (-0.7%) were the biggest losers.
Asian equity markets are mixed this morning; the Nikkei and Hang Seng are up, while the Shanghai Composite is down.

President Trump has announced that the US has reached a trade deal with Indonesia.
The deal will see will a 19% tariff being imposed on Indonesia, while US exports will not face any tariffs.
Indonesia was initially threatened with a 32% tariff.
The deal with Indonesia is the fourth trade framework that President Trump has announced, after Vietnam and the UK.
The US and China have also reached a tariff truce.
More than 20 tariff letters have been sent since last week.

Richmond Fed President Tom Barkin has remarked that he trusts that the next leader of the Fed will pursue monetary policy that’s best for the economy.
He noted that the Fed’s interest rate committee does not need to take direction from the chair.
Barkin cited episodes in the Fed’s history when the FOMC didn’t follow the lead recommendations of the chairman.
He added that President Trump’s tariffs have not yet had an impact on inflation.
However, the latest print reflected some growing price pressures.
He expects more price pressure in the coming months.

US PPI for June is scheduled for release today; PPI is expected at 2.5% y/y, from 2.6% y/y in May.
On a m/m basis, PPI is expected to have increased by 0.2% in June, after having increased by 0.1% m/m in May.
The Fed’s Beige Book for July is also on the cards today.
The report is likely to describe economic activity as little changed since the June report, and it may continue to reflect the cautious tone of recent editions.

BOE Governor Andrew Bailey in his Mansion House speech noted that the US trade war with the rest of the world is the wrong approach to addressing imbalances in the global economy.
Bailey called for greater cooperation between countries, especially the US and China, to address and resolve trade and financial imbalances.
He noted that these imbalances are the cause of escalating political tensions.

The UK data on inflation for June will be closely monitored by the BOE.
CPI for June is expected to have remained steady, at 3.4% y/y.
On a m/m basis, CPI is expected to have increased by 0.1% in June, after having increased by 0.2% m/m in May.
Core CPI is likely to come in at 3.5% y/y in June, matching May’s increase.
The house price index for May is also due out today; the index increased by 3.5% y/y in April, down from 7.0% y/y in March.

Locally, May retail sales data will be released today; retail sales are likely to have increased by 4.5% y/y in May, following a 5.1% y/y increase in April.
On a m/m basis, sales increased by 0.9% m/m in April

Brent crude oil is currently at $68.98/bbl; ($68.71/bbl*).
Gold is at $3339/oz ($3324/oz*).
SA CDS 193bps*, Brazil 147bps* and Turkey 287bps*.
Yields: US 10yr at 4.48%*, German bund at 2.71%*, SA 10-year generic at 9.92%*, SA’s R2035 at 9.84%*.

* Denotes yesterday’s close.

Key events and data:

08h00: UK CPI (June), RPI (June)
10h30: UK house price index (May)
11h00: Eurozone trade balance (May)
13h00: SA retail sales (May)
13h00: US MBA mortgage applications (11 July)
14h30: US PPI (June)
15h15: US industrial production (June), capacity utilisation (June), capacity utilisation (June)
20h00: US Fed Beige Book

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