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In the loop 04 July 2025

In the loop

Shireen Darmalingam

What you should know this morning:

  • The rand is stronger this morning, at R17.48/$, after closing stronger yesterday (R17.51/$*).
  • EM currencies were mixed yesterday; the TWD (+0.7%), MXN (+0.5%) and INR (+0.5%) were the biggest gainers; the KRW (-0.6%), CLP (-0.3%) and BGN (-0.2%) were the biggest losers.
  • Asian equity markets are mixed this morning; the Nikkei and Hang Seng are down, while the Shanghai Composite is up.
 
  • Atlanta Fed President Raphael Bostic yesterday urged the Fed to adopt a wait-and-see approach to monetary policy, especially amid economic uncertainty. 
  • Bostic cited the need to avoid reversing the course on interest rates.
  • Bostic further added that higher US government debt levels could eventually affect policymakers, potentially "crowding out" other activities and affecting prices and employment in material ways.
 
  • US Treasury Secretary Scott Bessent yesterday noted that President Trump would decide on whether to extend tariff talks with trading partners past the 9 July deadline when higher tariff rates are expected to kick in.
  • The EU, Japan, and other US trading partners are currently subjected to a 10% universal tariff.
  • Bessent met with EU trade negotiators as the EU scrambles for a trade deal.
  • Bessent added that the trade deal with Vietnam is "finalized in principle".
  • He stressed that the 20% tariff announced by Trump won't "stack" on top of the 10% universal tariff for Vietnam.
  • Talks have also been ongoing with Japan, although no deal has been reached.
  • Bessent indicated that domestic politics may have complicated the negotiations.
  • President Trump indicated that he may start sending letters to trading partners to set unilateral tariffs ahead of next week’s deadline.
 
  • The US House of Representatives yesterday approved the wide-ranging tax and spending bill.
  • The bill will now be sent to President Trump for final approval; President Trump is expected to sign the "Big Beautiful Bill" later today.
  • The $3.4 trillion fiscal package looks at a “broad set of tax cuts, expands deductions for families and seniors, and includes provisions eliminating taxes on tips and overtime pay”.
  • Treasury Secretary Bessent noted that the bill would “unleash the full potential of the US economy” and “prevent the largest tax hike in history”.
 
  • The US ISM services index increased in June, to 50.8, from 49.9 in May.
  • The increase came as businesses took advantage of the delays in tariffs.
 
  • Locally, it’s a quiet day as far as data releases are concerned.
 
  • Brent crude is down this morning, and down by 8.0% year-to-date.
  • The gold price is up this morning, and up by 27.3% year-to-date.
 
  • Brent crude oil is currently at $68.70/bbl; ($68.80/bbl*).
  • Gold is at $3341/oz ($3326/oz*).
  • SA CDS 183bps*, Brazil 140bps* and Turkey 280bps*.
  • Yields: US 10yr at 4.34%*, German bund at 2.61%*, SA 10-year generic at 9.80%*, SA’s R2035 at 9.73%*.
 

* Denotes yesterday’s close.

Key events and data: 

  • 11h00: Eurozone PPI (May)
  • US holiday – Independence Day
 
 

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