In the loop 20 June 2025

In the loop

Christelle Grobler

What you should know this morning:

The rand is stronger, at R18.00/$ this morning, after closing weaker yesterday (R18.13/$*).
EM currencies were mostly weaker yesterday; the ARS (-1.90%), PHP (-0.87%) and ZAR (-0.85%) were the biggest losers; the CLP (+0.41%) and CNY (+0.02%) gained.
Asian equity markets are mixed; the Nikkei is down, while the Hang Seng and Shanghai Composite are up.

Japan’s core inflation has reached a two-year high.
CPI inflation came in at 3.5% y/y in May, from 3.6% y/y in April.
Excluding fresh food, CPI accelerated to 3.7% y/y in May, from 3.5% y/y in April – the third month of acceleration.
Other food items, such as rice (with a price increase of 102% y/y in May), put upward pressure on inflation.
Services inflation was 1.4% y/y in May, from 1.3% y/y in April.
The BOJ kept interest rates unchanged earlier this week, noting that the underlying inflation trend still remains below the bank’s 2% target.
BOJ Governor Kazuo Ueda remarked that the bank would be carefully monitoring the impact of oil and rising food prices on inflation expectations.
Ueda signalled no need to rush on a rate hike amid high uncertainty, including about the impact of US tariffs.

UK consumer confidence rose in June; the GfK consumer confidence index improved to -18.
This is up from -20 in May, where the index was expected to have remained in June.
An improvement in the rating of the economic outlook in the next 12 months lifted consumer sentiment.
The economic outlook index increased to -28 in June, from -33 in May.
Both the outlook for personal finances in the next 12 months and the climate for major purchases sub-indices remained unchanged in June.
This morning, UK retail trade sales for May will be released.

The ECB will publish its Economic Bulletin today.
The Bulletin analyses economic information and forms the basis for Governing Council policy decisions.
Eurozone consumer confidence for June is also due this afternoon.
Consumer sentiment likely improved somewhat further in June, after having deteriorated in April to the lowest level since late 2023.
The index rose to -15.2 in May, from a low of -16.6 in April.

Brent crude oil is currently at $77.25/bbl; ($78.85/bbl*).
Gold is at $3348/oz ($3371/oz*).
SA CDS 199bps*, Brazil 160bps* and Turkey 312bps*.
Yields: US 10yr at 4.39%**, German bund at 2.52%*, SA 10-year generic at 10.17%*, SA’s R2035 at 10.12%*.

* Denotes yesterday’s close; **denotes Wednesday’s close.

Key events and data:

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