In the loop

What you should know this morning:

• The rand is stronger this morning, at R17.73/$, after closing stronger yesterday (R17.74/$*).
• EM currencies were mixed yesterday; the PHP (+0.9%), RUB (+0.8%) and BRL (+0.7%) were the biggest gainers; the MYR (-0.1%) and MXN (-0.1%) were the biggest losers.
• Asian equity markets are mixed this morning; the Nikkei and Shanghai Composite are up, while Hang Seng is down.

• President Trump’s global tariffs came into effect yesterday. 
• The reciprocal tariffs have raised levies — even on economies with new US trade deals, including the EU and Japan. 
• China’s trade truce with the US is due to end on 12 August; Mexico also has a pause in new tariffs for 90 days.
• Steep tariffs on India have been imposed as punishment for India’s purchases of Russian oil.
• South Africa now faces steep tariffs of 30%, the highest duty charged on goods from any sub-Saharan nation.
• Trump has indicated that he would soon announce other tariffs on pharmaceuticals, consumer electronics, and other sectors, which are exempt from the reciprocal tariffs.

• Atlanta President Raphael Bostic commented that he expects one interest rate cut this year. 
• Bostic reiterated that there are reasons to be sceptical that the inflationary effects from tariffs will be temporary. 
• Further, Bostic stated that “frequent evolution of tariffs is extending the time frame that the levies and the prospect of higher prices are on consumers’ minds, which risks lifting inflation expectations”.
• He added that there are likely to be strategic adjustments in tariffs into 2026.

• Governor Christopher Waller noted that the Fed can “look through” the inflation impact of tariffs as transitory.
• Waller had voted for a 25 bps rate cut at the July FOMC meeting; the Fed kept rates unchanged at that meeting.
• It’s been reported that, among President Trump’s advisers, Waller seems to be a top candidate as the next Fed chair. 
• Trump’s advisers had been impressed with Waller’s willingness to move on policy-based forecasting, instead of basing decisions on current data.

• President Trump announced that had chosen Council of Economic Advisers Chairman Stephen Miran to serve as a Federal Reserve governor.
• Miran would only serve the expiring term of Fed Governor Adriana Kugler, which ends in January. 
• Trump will continue to search for a permanent replacement.

• Locally, it’s a quiet day for data releases.
• President Cyril Ramaphosa and President Trump have engaged on the eve of the introduction of the US’s punitive new tariff regime.
• SA authorities are trying to invigorate negotiations on a new trade deal with the US.
• This after SA and the US have failed to make substantive progress on a trade deal since the White House meeting in May.
• President Ramaphosa noted in a statement that SA and the US are to engage further on the trade issue.
• Government estimates that 30,000 jobs will be lost across all sectors if government is unable to achieve a more favourable deal. 
• Further, the SARB estimates that more than 100,000 jobs in the automotive and agriculture sectors may be at risk.

• Brent crude is down this morning, and down by 11.1% year-to-date.
• The gold price is up this morning, and up by 29.4% year-to-date.

• Brent crude oil is currently at $66.34/bbl; ($66.43/bbl*).
• Gold is at $3397/oz ($3396/oz*).
• SA CDS 182bps*, Brazil 144bps* and Turkey 276bps*.
• Yields: US 10yr at 4.25%*, German bund at 2.63%*, SA 10-year generic at 9.73%*, SA’s R2035 at 9.64%*.

* Denotes yesterday’s close.

Key events and data: 

• No economic data releases.

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