In the loop 01 August 2025

In the loop

Shireen Darmalingam

What you should know this morning:

The rand is weaker this morning, at R18.22/$, after closing weaker yesterday (R18.19/$*).
EM currencies were mixed yesterday; the CLP (+1.0%) and RUB (+0.9%) were the biggest gainers; the ARS (-3.9%), ZAR (-1.3%) and PHP (-1.3%) were the biggest losers.
Asian equity markets Nikkei, Hang Seng and Shanghai Composite are down.

US President Trump issued an executive order on Thursday evening announcing tariffs.
He said that the tariffs are designed to lower the US’s trade deficit with many countries.
He noted that he will be maintaining a minimum global tariff of 10%, while imports from countries with trade surpluses with the US face duties of 15%, or higher.
Further, Trump followed through on his threat to hike tariffs on exports from Canada, one of the US’s largest trading partners, to 35%, from 25%.
He also agreed to extend the trade deal with Mexico for 90 days.
He noted that Mexico “will continue to pay a 25% fentanyl tariff, 25% tariff on cars, and 50% tariff on steel, aluminium and copper”.
Further, he described India as a “dead economy” — and noted that the US does “very little business” with India.
His comments come after the US and India hit an impasse over the threat of 25% tariffs on Indian goods.
Further, there will be a 15% tariff on imports of EU wine and spirits from today, 1 August.
EU negotiations with the US will continue.
President Trump also confirmed that SA will face 30% tariffs, which will come into effect in seven days.

The UK Nationwide house price index for July is on the cards today; prices are expected to have increased by 2.2% y/y, from 2.1% y/y in June.
This is expected as the market gradually bounces back after a weak quarter.
Growth weakened in Q2 on the back of higher taxes and uncertainty about the global economy.
Eurozone inflation for July, scheduled for release on Friday, is likely to have moderated to 1.9% y/y, from 2.0% y/y in June.
On a m/m basis, CPI is expected to have declined by 0.1% in July, following a 0.3% increase in June.
Core CPI is likely to have remained unchanged, at 2.3% y/y, in July.

The US non-farm payrolls (NFP) for July, in the spotlight today, are expected to have increased, by 104k, down from an increase of 147k in June.
The unemployment rate is likely to have to have increased to 4.2% in July, from 4.1% in June.
The headline ISM manufacturing PMI is expected to improve slightly in July, to 49.5, from 49.0 in June.

Locally, the BER manufacturing PMI for July is due for release today; the index increased to 48.5 in June, from 43.1 in May.
The July Naamsa vehicle sales are also on the cards; vehicle sales increased by 18.7% y/y in June.

Brent crude oil is currently at $71.82/bbl; ($72.53/bbl*).
Gold is at $3294/oz ($3289/oz*).
SA CDS 186bps*, Brazil 150bps* and Turkey 278bps*.
Yields: US 10yr at 4.37%*, German bund at 2.69%*, SA 10-year generic at 9.77%*, SA’s R2035 at 9.70%*.

* Denotes yesterday’s close.

Key events and data:

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