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In the loop 10 July 2025

In the loop

Shireen Darmalingam

What you should know this morning:

  • The rand is unchanged this morning, at R17.79/$, after closing stronger yesterday (R17.79/$*).
  • EM currencies were mixed yesterday; the COP (+1.0%), MXN (+0.7%) and RUB (+0.7%) were the biggest gainers; the BRL (-2.2%), CLP (-0.8%) and THB (-0.5%) were the biggest losers.
  • Asian equity markets are mixed this morning; the Nikkei is down, while the Hang Seng and Shanghai Composite are up.
 
  • Central bank watch: the US FOMC meeting minutes of the 17-18 June meeting were released yesterday.
  • The Fed minutes showed that policymakers were divided over the outlook for interest rates.
  • This division is being driven to a large extent by differing expectations on how tariffs might affect inflation.
  • Most policymakers see that “some reduction” in the Fed funds rate would likely be appropriate this year. 
  • Ten of 19 officials expect at least two rate cuts by the end of this year.
  • Seven policymakers, however, projected no cuts at all in 2025, while two projected one cut.
  • It was noted that a stable economy provides room for the Fed to be patient on rate adjustments.
 
  • President Trump yesterday issued tariff letters to seven more US trading partners, setting tariff rates ranging from 20-30%.
  • Some of these smaller US trading partners include the Philippines, Algeria, Iraq, Sri Lanka, Libya, Brunei and Moldova.
  • Trump also announced a 50% tariff on imports from Brazil, from an initial 10%.
  • The EU, the biggest bilateral trading partner of the US, said that it is on course to reach a trade agreement with the US in the coming days.
  • Trump noted that he would "probably" tell the EU within two days what rate it could expect for its exports to the US. 
  • He added that the bloc had become much more cooperative.
  • He also noted that the US would begin levying a 50% tariff on copper imports, from 1 August.
 
  • The BOEs Financial Stability Report, released yesterday, highlighted that geopolitical turmoil, a trade war and a deterioration in government bond markets have increased the uncertainty over the outlook for global growth.
  • The report noted that the outlook for UK growth over the coming year is “a little weaker”, amid increased uncertainty, than it was in the November report.
  • However, the ability of UK households, to continue repaying their mortgages and other debts, is largely expected to “remain resilient”.
 
  • Sentiment across the UK property market remains subdued.
  • The UK’s Royal Institute of Chartered Surveyors (RICS) house price balance came in at -7% in June, unchanged from May.   
  • Ongoing uncertainty around global trade policies will continue to weigh on sentiment.
 
  • Locally, manufacturing production for May is due out today; production is expected to have declined by 1.4% y/y in May, after having fallen by 6.3% y/y in April. 
  • On a m/m basis, manufacturing production is likely to have increased by 0.3% in May, following a 1.9% increase in April.
 
  • Brent crude is up this morning, and down by 5.8% year-to-date.
  • The gold price is down this morning, and up by 26.6% year-to-date.
 
  • Brent crude oil is currently at $70.28/bbl; ($70.19/bbl*).
  • Gold is at $3322/oz ($3313/oz*).
  • SA CDS 188bps*, Brazil 142bps* and Turkey 285bps*.
  • Yields: US 10yr at 4.33%*, German bund at 2.67%*, SA 10-year generic at 9.91%*, SA’s R2035 at 9.84%*.
 

* Denotes yesterday’s close.

Key events and data: 

  • 13h00: SA manufacturing production (May)
  • 14h30: US initial jobless claims (5 July)
 

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