In the loop 10 June 2025

In the loop

Shireen Darmalingam

What you should know this morning:

The rand is weaker this morning, at R17.75/$, after closing stronger yesterday (R17.70/$*).
EM currencies were mixed yesterday; the HUF (+0.8%), PEN (+0.7%) and PLN (+0.5%) were the biggest gainers; the COP (-0.6%), PHP (-0.3%) and CLP (-0.2%) were the biggest losers.
Asian equity markets the Nikkei, Hang Seng and Shanghai Composite are up.

Trade talks between the US and China commenced yesterday.
The two nations have been at odds over elevated tariffs to be imposed by the Trump administration.
The US has signalled that it would be open to removing restrictions on some tech exports, in exchange for assurance that China would ease the levies on rare earth shipments.
Negotiations are aimed at restoring confidence that both nations are living up to commitments made in Geneva.
The US and China agreed to lower tariffs for 90 days to allow time to agree on a way forward to address the trade imbalance that the Trump administration blames on an unfair playing field.
Talks are expected to continue today.

US consumers' expectations for future price pressures improved in May.
NY Fed inflation expectations for one, three and five years ahead decreased in May.
Projections for 1-year ahead inflation expectations declined the most, to 3.2% in May, from 3.6% in April.
Expectations for inflation three years ahead slipped to 3% in May, from 3.2% in April.
Expectations five years ahead edged down to 2.6% in May.
Fed policymakers are keeping a close eye on the data to assess whether tariffs could lead to a persistent inflation spike.
The US NFIB small business optimism index for May is on the cards today and is expected to have increased to 96.0, from 95.8 in April.

UK labour data is also on the cards and is expected to indicate a further slowdown in wage growth for the three months ended in April.
The ILO unemployment rate is expected to have increased to 4.6% in April, from 4.5% in March.
Average earnings excluding bonuses likely increased 5.3% y/y in the three months to April, following a 5.6% y/y increase in the three months to March.
A low response rate to the survey continues to distort the results of the Labour Force Survey.
The BOE is keeping a close eye on wage growth for signs of underlying price pressure.

ECB Governing Council member Robert Holzmann yesterday noted that the central bank might keep rates on hold over the summer.
He noted that he would want to be sure that the economy does not experience another bout of rising inflation before cutting rates again.
The ECB will meet in July to decide on rates.
The Eurozone Sentix investor confidence index is due out today and likely improved to -5.5 in June, from -8.1 in May.

Locally, manufacturing production for April is due out today; production is expected to have declined by 4.8% y/y in April, after having fallen by 0.8% y/y in March.
On a m/m basis, manufacturing production is likely to have increased by 0.9% in April, following a 2.2% decline in March.

Brent crude oil is currently at $67.18/bbl; ($67.04/bbl*).
Gold is at $3315/oz ($3337/oz*).
SA CDS 190bps*, Brazil 156bps* and Turkey 297bps*.
Yields: US 10yr at 4.47%*, German bund at 2.56%*, SA 10-year generic at 10.18%*, SA’s R2035 at 10.13%*.

* Denotes yesterday’s close.

Key events and data:

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