In the loop 09 July 2025

In the loop

Shireen Darmalingam

What you should know this morning:

The rand is stronger this morning, at R17.77/$, after closing weaker yesterday (R17.84/$*).
EM currencies were mixed yesterday; the BRL (+0.7%), ARS (+0.7%) and PHP (+0.6%) were the biggest gainers; the ZAR (-0.3%), BGN (-0.3%) and MXN (-0.1%) were the biggest losers.
Asian equity markets are mixed this morning; the Nikkei and Shanghai Composite are up, while the Hang Seng is down.

Central bank watch: the Reserve Bank of New Zealand (RBNZ) has kept its benchmark interest rate unchanged, at 3.25%.
The RBNZ expects to ease rates further if price pressures abate.
The Central Bank of Malaysia will be meeting today to decide on rates.
The bank is expected to keep its benchmark interest rate steady as it awaits further information on domestic demand and external pressures.
The US FOMC meeting minutes of the 17-18 June meeting will be released today.
The minutes are likely to reflect a committee divided on interest rates.
Fed Chair Jerome Powell last week noted that the Fed funds rate likely would have been lower, had it not been for the impact of tariffs this summer.

President Trump yesterday indicated that he would push ahead with his tariff policies.
He noted that he would not offer additional extensions on country-specific levies which are due on 1 August.
He also commented that he would implement substantial new tariffs on imports of copper (50%) and pharmaceuticals.
President Trump further stated that, even though he had previously indicated that he was close to reaching a trade deal with India, he still plans to “punish” India for its participation in the BRICS forum.
He reiterated yesterday that any country that affiliates with the BRICS nations would be getting an additional 10% tariff.
Trump also said that he would impose tariffs of 60% or 70% on some nations as he plans to issue additional tariff letters in the coming days.

President Trump yesterday again commented that Fed Chair Jerome Powell should "resign immediately" if allegations that the chair had misled lawmakers prove true.
Trump has repeatedly criticized Powell over the Fed’s decisions to hold rates steady this year.
He indicated last month that he would choose a successor willing to cut borrowing costs.
Powell’s term as chairman expires in May 2026.

NY Fed inflation expectations for one year decreased in June, while inflation expectations for three and five years ahead remained unchanged.
Projections for 1-year ahead inflation expectations declined, to 3.0% in June, from 3.2% in May.
Expectations for inflation three years ahead remained steady, at 3%, while expectations five years ahead held at 2.6% in June.
Fed policymakers are keeping a close eye on the data to assess whether tariffs could lead to a persistent inflation spike.

Locally, it’s a quiet day as far as data releases are concerned.
Finance Minister Enoch Godongwana yesterday noted that work on adjusting the inflation target lower is “progressing well”.
He nonetheless cautioned authorities against rushing to implement a new target.
He added that “such decisions should not be taken in haste, without the necessary technical and political engagements”.
Consensus needs to be achieved with a thorough consideration of the social and economic realities.
The SARB has repeatedly argued for the inflation target to be adjusted to a single goal of 3%.
CPI has been hovering at, or near, that level since October last year.

Brent crude oil is currently at $69.95/bbl; ($70.15/bbl*).
Gold is at $3292/oz ($3301/oz*).
SA CDS 189bps*, Brazil 145bps* and Turkey 287bps*.
Yields: US 10yr at 4.39%*, German bund at 2.68%*, SA 10-year generic at 9.94%*, SA’s R2035 at 9.87%*.

* Denotes yesterday’s close.

Key events and data:

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