In the loop

What you should know this morning:

• The rand is stronger this morning, at R18.83/$, after closing stronger yesterday (R18.85/$*).
• EM currencies were mixed yesterday; the ZAR (+1.7%), RUB (+1.4%) and MXN (+1.2%) were the biggest gainers; the ARS (-10.2%), COP (-0.5%) and HUF (-0.2%) were the biggest losers.
• Asian equity markets are mixed this morning; the Nikkei and Hang Seng are up, while the Shanghai Composite is down.

• The German ZEW expectations survey for April may have fallen significantly on the back of tariff concerns.
• The sentiment index is expected to have decreased to 10.0 in April, from 51.6 in March.
• The short-term outlook remains dominated by the risk of US tariffs on European exports.
• The Eurozone ZEW survey expectations index came in higher, at 39.8, in March.
• The ECB’s bank lending survey is also scheduled for release today.
• The survey is expected to show that lending conditions continued to stabilise, after having improved noticeably over the last two years.

• The UK labour data for the three months to February is also on the cards.
• The unemployment rate is likely to have remained unchanged, at 4.4%, in February.
• A low response rate to the Labour Force Survey continues to distort the survey results.

• President Trump yesterday suggested that he would grant a temporary reprieve to auto-related tariffs that are already in place.
• He was considering a reprieve the 25% tariffs imposed on foreign auto parts imports from Mexico, Canada, and other countries.
• Exemptions are also being discussed for various sectors.

• Fed Governor Christopher Waller commented yesterday that the trade-driven inflation impact is likely to be temporary.
• Waller highlighted two scenarios for how President Trump’s 's trade policy could impact the US economy.
• The “large tariff” scenario sees economic growth slowing, unemployment rising, and inflation peaking near 5%, before moderating in 2026.
• The "smaller tariff" scenario sees the impact on inflation as smaller. Here, inflation may peak around 3%.
• He noted that the tariff policy is “one of the biggest shocks to affect the US economy in many decades”.
• Atlanta Fed President Raphael Bostic said that policymakers need to wait for further clarity on President Trump’s policies before adjusting interest rates.

• The Fed Bank of New York survey showed that US consumer inflation expectations (one-year ahead) increased to 3.58% in March, from 3.1% in February.
• The survey noted that consumers are now more anxious about job prospects.
• Nearly one third of households expect to be in a worse financial position in a year.
• The US Empire manufacturing survey for April is due out today; consumer sentiment is expected to have improved.
• The index is likely to have improved to -13.5 in April, from -20.0 in March.
• Looking ahead, however, trade policy uncertainty is expected to continue to weigh on activity in the industry.

• Locally, mining production for February is due out today, and likely declined by 2.7% y/y in January.
• Mining production declined by 1.2% m/m in January.

• Brent crude is up this morning, and down by 12.7% year-to-date.
• The gold price is up this morning, and up by 22.9% year-to-date.

• Brent crude oil is currently at $65.17/bbl; ($64.88/bbl*).
• Gold is at $3225/oz ($3207/oz*).
• SA CDS 260bps*, Brazil 191bps* and Turkey 353bps*.
• Yields: US 10yr at 4.34%*, German bund at 2.51%*, SA 10-year generic at 10.95%*, SA’s R2035 at 10.93%*.

* Denotes yesterday’s close.

Key events and data: 

• 08h00: UK ILO unemployment rate (February)
• 10h00: Eurozone ECB bank lending survey
• 11h00: Germany ZEW survey expectations (April), industrial production (February)
• 11h30: SA mining production (February)
• 14h30: US Empire manufacturing (April)

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