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 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:

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