In the loop 22 August 2025

In the loop

Christelle Grobler

What you should know this morning:

The rand is trading at R17.74/$ this morning, after closing weaker yesterday (R17.74/$*).
EM currencies were mostly weaker yesterday; the ARS (-1.0%), HUF (-1.0%) and CZK (-0.8%) were the biggest losers; the BRL (+0.1%) and MYR (+0.1%) gained.
Asian equity markets, the Nikkei, Hang Seng and Shanghai Composite, are up this morning.

Japan’s CPI inflation slowed to 3.1% y/y in July, from 3.3% y/y in June, as expected.
Energy prices being lower was the main driver of the slowdown in the CPI; energy prices declined 0.3% y/y in July – the first decline since March 2024.
Food inflation has continued to accelerate, with processed food prices up 8.3% y/y in July.
Consumer inflation is still well above the BOJ’s 2% target; the central bank may hike interest rates again this year.

UK GfK consumer confidence improved in August, to its strongest level in a year.
The index increased to -17 in August, from -19 in July.
GfK noted that the latest interest rate cut from the BOE supported consumer confidence in August.
Sentiment remains subdued on the back of sticky inflation, rising unemployment, and the prospect of higher taxes.

Markets will be focused on Fed Chair Jerome Powell’s Jackson Hole speech this afternoon.
While Powell has before used this occasion to make market-moving policy statements, mixed economic data, and pressure from the Trump Administration to cut rates, will likely complicate this year’s address.
Key will be whether the Fed chair pushes back on the expectation for rate cuts; the bank has held rates steady this year, citing elevated uncertainty over the impact of tariffs.
Chicago Fed President Austan Goolsbee said that, while some recent inflation readings have come in better than expected, he hopes that one “dangerous” data point is just a blip.
Fed Bank of Cleveland chief Beth Hammack noted that she wouldn’t currently support easing.
Kansas Fed President Jeffrey Schmid recently remarked that the inflation risk still outweighs risks to the labour market.
US initial jobless claims rose to 235k for the week ended 16 August, from 224k in the prior week; seasonal factors might have contributed to the increase in claims.
Continuing claims were up to 1972k for the week ended 9 August, from a downwardly revised 1942k in the week before.
The Philadelphia Fed business outlook indicator dropped sharply, to -0.3 in August, from 15.9 in July.

The US Department of Justice has joined the call for Fed Governor Lisa Cook to resign.
A top official, aligned with President Trump, signalled possible plans to investigate Cook, and encouraged Fed Chair Jerome Powell to remove her from the board.
This marks the latest escalation in the White House’s assault on the Fed.
Cook, a presidential appointee under Joe Biden, has refused to step down, saying that she was “gathering the accurate information to answer any legitimate questions and provide the facts”.
Evidence of gross malfeasance would be needed to remove Cook “for cause”; her term is only due to finish in 2038.

Brent crude oil is currently at $67.65/bbl; ($67.67/bbl*).
Gold is at $3330/oz ($3339/oz*).
SA CDS 178bps*, Brazil 142bps* and Turkey 272bps*.
Yields: US 10yr at 4.33%*, German bund at 2.76%*, SA 10-year generic at 9.70%*, SA’s R2035 at 9.61%*.

* Denotes yesterday’s close.

Key events and data:

Read PDF