In the loop 07 August 2025

In the loop

Shireen Darmalingam

What you should know this morning:

The rand is stronger this morning, at R17.75/$, after closing stronger yesterday (R17.78/$*).
EM currencies were mixed yesterday; the COP (+1.1%), BRL (+0.8%) and PLN (+0.6%) were the biggest gainers; the CLP (-1.0%), TWD (-0.2%) and THB (-0.1%) were the biggest losers.
Asian equity markets the Nikkei, Hang Seng and Shanghai Composite are up.

Central bank watch: the BOE’s interest rate decision is in the spotlight today.
The central bank is expected to cut its benchmark interest rate by 25 bps, to 4.0%.
The central bank, however, is expected to strike a cautious tone with regard to signalling further interest rate cuts.
This is on the back of recent upside inflation surprises and elevated inflation expectations.

China’s July trade data exhibited the resilience of its export sector as it navigates tariff headwinds and global demand cooling.
Exports increased by 7.2% y/y in July, following a 5.9% y/y increase in June.
Imports were up by 4.1% y/y in July, after having increased by 1.1% y/y in June.

The UK’s Decision Maker Panel 3m and 1yr inflation expectations for July are due out today.
One-year ahead inflation expectations are expected to have remained unchanged, at 3.3%, in July.
The 3-month ahead inflation expectations also likely to have remained unchanged, at 3.6%, in July.

Minneapolis Fed President Neel Kashkari yesterday commented that an interest rate cut may be appropriate in the near term.
Kashkari noted that the slowing US economy warrants a cut at this stage.
Kashkari sees at least two Fed rate cuts by the end of the year.
He cited tariffs as representing significant uncertainty in the economy, noting the likely impact on inflation as unclear.
Further, he noted that policymakers could cut fewer times if there are signs the inflationary effects from tariffs could be persistent.

Fed Governor Lisa Cook yesterday noted that the July non-farm payrolls report was “concerning,” and said it could signal an inflection point for the US economy.
The labour data published last week pointed to a significant cooling in the labour market over the last few months.
Boston Fed President Susan Collins commented that uncertainty in the economy was leading to a wait-and-see approach to price-setting.

President Trump yesterday signed an executive order imposing an additional 25% tariff on India over India’s purchases of Russian oil.
These tariffs will be added on top of the 25% country-specific tariffs.
Separately, Trump also said that would he impose a 100% tariff on microchip imports.
He noted that he would exempt companies that move production back to the US.

Locally, the SARB’s gross and net reserves for July are scheduled for release.
Gross reserves came in at $68.42bn in June, and net reserves at $65.22bn in June.
Electricity production and consumption for June are scheduled for release.

Brent crude oil is currently at $67.34/bbl; ($66.89/bbl*).
Gold is at $3374/oz ($3369/oz*).
SA CDS 188bps*, Brazil 150bps* and Turkey 280bps*.
Yields: US 10yr at 4.22%*, German bund at 2.65%*, SA 10-year generic at 9.75%*, SA’s R2035 at 9.66%*.

* Denotes yesterday’s close.

Key events and data:

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