In the loop 23 July 2025

In the loop

Shireen Darmalingam

What you should know this morning:

The rand is stronger this morning, at R17.54/$, after closing stronger yesterday (R17.55/$*).
EM currencies were mixed yesterday; the ARS (+1.6%), CZK (+0.5%) and HUF (+0.5%) were the biggest gainers; the COP (-0.8%), RUB (-0.5%) and TWD (-0.1%) were the biggest losers.
Asian equity markets the Nikkei, Hang Seng and Shanghai Composite are up.

Central bank watch: the Central Bank of Sri Lanka has kept its overnight rate at 7.75%.

Eurozone consumer confidence index for July is on the cards today.
Consumer confidence is expected to have improved slightly, albeit still in the negative, at -15.0 in July, from -15.3 in June.

President Trump has commented that the US has reached a trade deal with Japan.
The deal includes a $550bn investment into the US and a 15% tariff on imports from Japan.
The US has also reached an agreement with the Philippines, setting a 19% tariff on the country’s exports.
The US is expected to meet with China next week for a third round of trade talks.

Yesterday US Treasury Secretary Scott Bessent stated there is no immediate need for Fed Chair Jerome Powell to resign.
President Trump has commented that Powell is expected to leave his position “within eight months”.
Trump also commented that Powell has kept interest rates too high and that he is “probably doing it for political reasons”.
Continuing with criticism of the Fed chair, he added that he doesn’t think that Powell has done a good job.
Trump remarked that Interest rates should be 3% lower, if not more.

The Richmond Fed manufacturing index deteriorated in July, against expectations for an improvement.
The index fell further in July, to -20 (the lowest since August 2024), from -8 in June.
The indices for new orders, shipments and number of employees fell in July.
Despite the deterioration, firms remain cautiously optimistic about future demand.
The indices for expected orders and shipments over the next six months edged up slightly.
The business conditions index improved to -8 in July, from -14 in June.

US existing home sales for June are due out today; existing home sales are expected to have declined by 0.7% m/m in June, after having increased by 0.8% m/m in May.
Elevated interest rates in the US have been affecting the housing market.
Mortgage rates are close to 7%; in addition, affordability levels are currently at their worst levels.

Locally, the June CPI is in the spotlight today and is expected to come in at 3.1% y/y, from 2.8% y/y in May.
On a m/m basis, CPI is likely to have increased by 0.3% in June, after having increased by 0.2% in May.
Core CPI is expected to have remained unchanged in June, at 3.0% y/y.
We maintain that the odds are biased towards another interest rate cut at the upcoming MPC meeting next week.
The interest rate outlook, however, is still clouded by persistent uncertainty about a possible lowering of the inflation target.

Brent crude oil is currently at $68.86/bbl; ($68.59/bbl*).
Gold is at $3422/oz ($3431/oz*).
SA CDS 187bps*, Brazil 148bps* and Turkey 285bps*.
Yields: US 10yr at 4.34%*, German bund at 2.59%*, SA 10-year generic at 9.93%*, SA’s R2035 at 9.85%*.

* Denotes yesterday’s close.

Key events and data:

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