In the loop 31 March 2025

In the loop

Christelle Grobler

What you should know this morning:

The rand is trading at R18.38/$ this morning, after closing weaker on Friday (R18.43/$*).
EM currencies were mixed on Friday; the CLP (-1.8%), ZAR (-1.0%) and COP (-0.7%) were the biggest losers; the PLN (+0.4%), CZK (+0.4%) and INR (+0.4%) were the biggest gainers.
Asian equity markets the Nikkei, Hang Seng and Shanghai composite are down.

China released official PMI data for March this morning, showing stronger-than-expected increases across the board.
The manufacturing PMI rose to 50.5 in March, up from 50.2 in February; remaining above the 50-mark, it continued to signal expansion.
Non-manufacturing industries also surprised on the upside, with this PMI rising to 50.8 in March, from 50.4 in February.
The services PMI increased to 50.3 in March, after coming in at 50 in February; the construction sub-index rose further, to reach 53.4 in March (from 52.7 in February).
In all, the composite PMI stood at 51.4 in March, compared to 51.1 in February; some of the increase in China’s official PMI data may be ascribed to seasonality.

Japan’s industrial production bounced back in February.
Industrial production increased by 2.5% m/m, following January’s contraction of 1.1% m/m; this was the fastest pace of expansion since March 2024.
Compared to a year ago, industrial production was 0.3% y/y higher in February, after increasing by 2.2% y/y in January.
Retail trade sales growth was 0.5% m/m in February, following an upwardly revised increase of 1.2% m/m (previously 0.5% m/m) in January.
Housing starts unexpectedly grew by 2.4% y/y in February, after contracting 4.6% y/y in January; this was the first expansion in housing starts since April 2024.

San Francisco Fed President Mary Daly still sees two rate cuts this year as “reasonable”.
However, she remarked that she is not “comfortable starting any kind of rate path declines right now”.
The Fed can take its time to assess the impacts of tariffs on the economy and decide on policy moves, according to Daly.
“We have no reason to rush to judgment because policy is in a good place, the economy is in a good place” she said.
“We need to give the new administration and the industries that are being affected by it time to understand what’s being changed and adjust to those changes”, Daly said.
“One hundred percent of my focus is on what’s happening with inflation”, noted Daly.

Locally, the SARB releases private sector credit data and money supply data for February this morning.
Private sector credit extension rose 4.6% y/y in January, with M3 money supply expanding 7.1% y/y.
Today also sees the release of SA’s trade balance for February.
SA recorded a trade deficit of R16.4bn in January.

Brent crude oil is currently at $73.40/bbl; ($73.63/bbl*).
Gold is at $3111/oz ($3085/oz*).
SA CDS 229bps*, Brazil 187bps* and Turkey 319bps*.
Yields: US 10yr at 4.25%*, German bund at 2.73%*, SA 10-year generic at 10.70%*, SA’s R2035 at 10.70%*.

* Denotes Friday’s close.

Key events and data:

Read PDF