In the loop 03 April 2025

In the loop

Shireen Darmalingam

What you should know this morning:

The rand is weaker this morning, at R18.90/$, after closing weaker yesterday (R18.83/$*).
EM currencies were mixed yesterday; the HUF (+0.9%), PLN (+0.8%) and KRW (+0.7%) were the biggest gainers; the ZAR (-2.0%), CLP (-0.9%) and MXN (-0.5%) were the biggest losers.
Asian equity markets the Nikkei, Hang Seng and Shanghai Composite are down.

China’s Caixin services PMI increased in March, to 51.9, from 51.4 in February.
The composite PMI also improved in March, to 51.8, from 51.5 in February.

The UK’s Decision Maker Panel 3m and 1yr inflation expectations for March are due out today.
One-year ahead inflation expectations are expected to have increased to 3.2% in March, from 3.1% in February.
The 3-month ahead inflation expectations are expected to have remained unchanged, at 4.0%, in March.

US President Trump yesterday announced reciprocal tariffs, noting that this would bring “stronger competition and lower prices for consumers” in the US.
President Trump announced a minimum 10% tariff on all exporters to the US.
He noted that several countries with the largest trade imbalances will face even higher rates.
China will face a 34% tariff, Japan 24%, while the European Union will have a 20% levy, and Vietnam is due to pay a 46% tariff.
China, the European Union, and other countries, have vowed countermeasures on the back of these reciprocal tariffs.
President Trump repeated that the US would impose a 25% tariff on all foreign-made automobiles, effective today.

The US ISM services index, due for release today, is likely to have slipped in March, to 52.9, from 53.5 in February.
Uncertainty regarding US trade policy is likely to have continued to weigh on the overall services industry.
Respondents in the services-related construction sector expect the proposed tariffs by the Trump administration to have a “significant cost impact” on projects.
The US trade deficit is likely to have narrowed to $123.5bn in February, from a deficit of $131.4bn in January.
January’s trade deficit widened on the back of a surge in imports ahead of tariffs by the Trump administration.

Locally, the industry-wide PMI for March is due out today; the index is currently below the 50pt benchmark, at 49.0.
Electricity production and consumption for February are also scheduled for release today.

The National Assembly yesterday approved the fiscal framework, which establishes economic policy, revenue projections, and limits on government spending.
Despite objections from the DA, the fiscal framework received 194 votes, to 182 against the framework.
The legislation includes the proposal to increase VAT, which the DA opposes and wants to scrap.
The DA said that it will file a legal challenge against the passing of the budget in the High Court as it noted that proper procedures weren’t followed.

Brent crude oil is currently at $73.13/bbl; ($74.95/bbl*).
Gold is at $3127/oz ($3131/oz*).
SA CDS 238bps*, Brazil 186bps* and Turkey 309bps*.
Yields: US 10yr at 4.13%*, German bund at 2.72%*, SA 10-year generic at 10.83%*, SA’s R2035 at 10.82%*.

* Denotes yesterday’s close.

Key events and data:

09h15: SA S&P Global industry-wide PMI (March)
10h00: Eurozone HCOB services and composite PMI (March – final)
10h30: UK S&P Global services and composite PMI (March – final), Decision Maker Panel (DMP) 3 m and 1 yr inflation expectations (March)
11h00: Eurozone PPI (February)
13h00: SA electricity production and consumption (February)
13h30: Eurozone ECB MPC meeting minutes (5-6 March)
14h30: US trade balance (February), initial jobless claims (29 March)
15h45: US S&P Global services and composite PMI (March – final)
16h00: US ISM services index (March)

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