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In the loop 14 March 2025

In the loop

Shireen Darmalingam

What you should know this morning:

  • The rand is stronger this morning, at R18.31/$, after closing stronger yesterday (R18.32/$*).
  • EM currencies were mixed yesterday; the RUB (+1.1%), MXN (+0.4%) and THB (+0.3%) were the biggest gainers; the HUF (-0.6%), CZK (-0.6%) and BGN (-0.5%) were the biggest losers.
  • Asian equity markets the Nikkei, Hang Seng and Shanghai composite are up.
 
  • US President Trump has threatened the European Union with a 200% tariff on wine, champagne and other alcoholic beverages from France and elsewhere in the region.
  • This new threat comes on the back of news of a tax on US whiskey exports.
  • This tariff is aimed at retaliating against President Trump’s steel and aluminium tariffs that became effective on Wednesday.
  • President Trump yesterday noted that he would not withdraw tariffs on steel and aluminium.
  • He reiterated that he would not back down on plans for sweeping reciprocal tariffs on global trading partners expected to begin on 2 April.
 
  • ECB President Christine Lagarde warned that an escalation of trade disputes would have a detrimental impact on the global economy.
  • Lagarde noted that Trump’s tariff decisions, and his counter decisions, are cause for concern.
  • She added that it would have an impact on growth and prices around the world, but particularly in the US.
  • The Eurozone thus remains “extremely vigilant” because of this uncertainty.
 
  • UK GDP data for January is due out today and will likely show that the economy increased only slightly, by 0.1% m/m, after increasing by 0.4% m/m in December.
  • Industrial production for January will also be released; industrial production is expected to have declined by 0.6% y/y in January, after having declined by 1.9% y/y in December. 
  • The sector is expected to continue to struggle, with no clear signs of any meaningful pickup in the coming months.
 
  • The US University of Michigan sentiment index for March is due out today.
  • The sentiment index is likely to have deteriorated to 63.0 in March, from 64.7 in February.
  • Both the 1 yr and 5-10 yr inflation expectations are expected to have moderated in March, to 4.2% and 3.4%, from 4.3% and 3.5% respectively.
 
  • Locally, SA President Cyril Ramaphosa yesterday noted at the EU-SA Summit that the turbulence on the global stage would likely serve to strengthen South Africa's relationship with the EU.
  • The EU and SA vowed to deepen cooperation as both economies grapple with aid and trade threats from the Trump administration.
  • European Commission head Ursula von der Leyen noted plans to mobilise a €4.7bn ($5bn) investment package in SA.
  • This package includes funding for a transition to clean energy and to boost the manufacture of vaccines.
  • It’s quiet day as far as data releases are concerned.
 
  • Brent crude is up this morning, and down by 5.8% year-to-date.
  • The gold price is up this morning, and up by 13.8% year-to-date.
 
  • Brent crude oil is currently at $70.30/bbl; ($70.95/bbl*).
  • Gold is at $2986/oz ($2979/oz*).
  • SA CDS 204bps*, Brazil 176bps* and Turkey 261bps*.
  • Yields: US 10yr at 4.26%*, German bund at 2.85%*, SA 10-year generic at 10.54%*, SA’s R2035 at 10.53%*.
 

* Denotes yesterday’s close. 

Key events and data: 

  • 09h00: UK monthly GDP (January), industrial production (January), manufacturing production (January), trade balance (January)
  • 16h00: US University of Michigan sentiment, 1 yr and 5-10 yr inflation expectations (March)
 

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