In the loop 22 July 2025

In the loop

Shireen Darmalingam

What you should know this morning:

The rand is stronger this morning, at R17.62/$, after closing stronger yesterday (R17.63/$*).
EM currencies were mixed yesterday; the CLP (+1.1%), ARS (+0.8%) and RON (+0.7%) were the biggest gainers; the COP (-0.7%), INR (-0.2%) and IDR (-0.1%) were the biggest losers.
Asian equity markets are mixed this morning; the Nikkei is down, while the Hang Seng and Shanghai Composite are down.

Central bank watch: the Central Bank of Nigeria is expected to keep rates on hold today.

The ECB’s quarterly Bank Lending Survey (BLS) is scheduled for release today.
The BLS will be closely watched to assess whether lending conditions in the region are continuing to stabilize.

The EU and the US will continue with trade negotiations this week, ahead of the 1 August deadline.
The EU is looking to reduce the 30% proposed tariff threatened by the US.
The EU noted that it is prepared to accept an unbalanced agreement that favour the US – if that is required to break the impasse before the deadline.
However, it will also likely retaliate with countermeasures in a scenario of no agreement.

US leading indicator for June declined by 0.3% m/m (the second consecutive decline), after falling by 0.1% m/m in May.
The decline comes as the impact of tariffs becomes more pronounced in the economy.
Five of the 10 components of the leading index contributed positively to the overall index in June.
However, the consumer expectations for business conditions and the ISM new orders index dragged down the leading indicator.
The Conference Board commented that, despite the decline, it does not foresee a recession.
However, economic growth is expected to slow substantially in 2025, compared to 2024.

US Treasury Secretary Scott Bessent yesterday commented that the performance of the Fed needs to be examined to assess whether it has been successful.
Bessent noted that “there has been very little, if any, inflation” from Trump’s tariff policies.
He added that it appears that central bankers are unable “to break out of a certain mindset”.
These comments come as President Trump in recent weeks questioned the independence of the central bank.
Further, he has criticised the decision by Fed Chair Jerome Powell to keep the Fed funds rate unchanged.
Trump has brought to the fore the renovations of the Fed headquarters as possible grounds for Powell’s dismissal.

Locally, the SARB’s leading indicator for May is scheduled for release today.
The index slipped to 112.8 in April, from 113.2 in March.
The largest negative contributors in April were a deceleration in the 6-month smoothed growth rate in the real M1 money supply and a decrease in the volume of domestic orders received in the manufacturing sector.

Brent crude oil is currently at $68.60/bbl; ($69.21/bbl*).
Gold is at $3388/oz ($3397/oz*).
SA CDS 190bps*, Brazil 145bps* and Turkey 285bps*.
Yields: US 10yr at 4.37%*, German bund at 2.61%*, SA 10-year generic at 10.05%*, SA’s R2035 at 9.96%*.

* Denotes yesterday’s close.

Key events and data:

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