In the loop

What you should know this morning:

• The rand is weaker this morning, at R17.59/$, after closing stronger yesterday (R17.57/$*).
• EM currencies were mixed yesterday; the COP (+0.8%), BRL (+0.6%) and TWD (+0.6%) were the biggest gainers; the ARS (-0.8%), MYR (-0.7%) and RUB (-0.5%) were the biggest losers.
• Asian equity markets are mixed this morning; the Nikkei and Shanghai Composite are up, while the Hang Seng is down.

• Central bank watch: the minutes of the ECB’s meeting on 4-5 June will be watched closely for any hints on the appetite for further interest rate cuts.

• China’s Caixin services PMI slipped in June, to 50.6, from 51.1 in May.
• This comes as foreign demand declined at the fastest pace since December 2022.
• The composite PMI increased in June, to 51.3, from 49.6 in May.

• US President Trump has announced that the US has reached a trade deal with Vietnam ahead of the 9 July deadline.
• The deal includes a 20% tariff on Vietnamese exports to the US, while imports from US would face no levy.
• As the July 9 deadline for tariffs nears, the European Union said that it may be willing to accept a one-sided deal with the USto prevent a trade war. 
• In a best-case scenario the EU would continue to face reciprocal tariffs at only 10% and avoids tariffs on cars, car parts, and steel and aluminum products.
• A worse-case scenario would see tariffs on cars and metals climbing go 50%.

• President Trump yesterday demanded that Fed Chair Jerome Powell "resign immediately”.
• This follows about comments from Bill Pulte, head of the Federal Housing Finance Agency, who called on Congress to investigate Powell over his alleged political bias and deception of the Senate.
• Trump has repeatedly threatened to remove Powell from his position as chair before his term expires next year.
• Trump has said that he had “two or three top choices” to potentially succeed Powell, but declined to name them.

• US non-farm payrolls (NFP) for June are in the spotlight today and are expected to have increased, by 110k, down from an increase of 139k in May.
• The unemployment rate is likely to have to have increased 4.3% in June, from 4.2% in May.
• The trade deficit for May is also due out today; the deficit is likely to have widened to $71.1bn, from a deficit of $61.6bn in April.
• The US will celebrate Independence Day on Friday (4 July).

• Locally, the S&P Global industry-wide PMI for June is due today; the index is currently above the 50 benchmark line, at 50.8.
• Electricity production and consumption for May are scheduled for release.

• Brent crude is down this morning, and down by 8.1% year-to-date.
• The gold price is down this morning, and up by 27.6% year-to-date.

• Brent crude oil is currently at $68.60/bbl; ($69.11/bbl*).
• Gold is at $3349/oz ($3357/oz*).
• SA CDS 184bps*, Brazil 145bps* and Turkey 283bps*.
• Yields: US 10yr at 4.26%*, German bund at 2.66%*, SA 10-year generic at 9.89%*, SA’s R2035 at 9.82%*.

* Denotes yesterday’s close.

Key events and data: 

• 09h15: SA S&P Global industry-wide PMI (June)
• 10h00: Eurozone HCOB services and composite PMI (June – final)
• 10h30: UK S&P Global services and composite PMI (June – final), DMP 3m and 1yr inflation expectations (June)
• 13h00: SA electricity production and consumption (May)
• 13h30: Eurozone ECB meeting minutes (4-5 June)
• 14h30: US trade balance (May), non-farm payrolls (June), unemployment rate (June), initial jobless claims (28 June)
• 15h45: US S&P Global services and composite PMI (June – final)
• 16h00: ISM services (June), factory orders (May), durable goods (May – final)

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