In the loop 23 April 2025

In the loop

Shireen Darmalingam

What you should know this morning:

The rand is stronger this morning, at R18.57/$, after closing stronger yesterday (R18.58/$*).
EM currencies were mixed yesterday; the CLP (+2.0%), BRL (+1.4%) and ZAR (+1.1%) were the biggest gainers; the PLN (-1.1%), HUF (-1.0%) and CZK (-0.8%) were the biggest losers.
Asian equity markets the Nikkei, Hang Seng and Shanghai Composite are up.

Central bank watch: Bank Indonesia is likely to keep rates unchanged at 5.75% today.

Eurozone consumer confidence deteriorated further in April, to -16.7, from -14.5 in March.
ECB Governing Council member Francois Villeroy de Galhau has said that Trump’s trade policies are dampening economic growth, including in the US.
It is also threatening financial stability.
Villeroy called for a de-escalation in order to avoid further increases in tariffs.

Eurozone and UK flash PMI data for April are due out today and will provide an indication of how economic growth is developing into Q2:25 and the first indications of the US tariff announcements.
The Eurozone HCOB composite PMI is expected to have slipped to 50.2 in April, from 50.9 in March.
The manufacturing index is likely to have slipped to 47.4 in April, from 48.6 in March; the services index is expected at 50.5 in April, from 51.0 in March.
The UK S&P Global composite PMI is also expected to have slipped to 50.4 in April, from 51.5 in March.
Both the manufacturing and services PMIs are expected to have deteriorated in April.

President Trump commented that he would cut China’s tariffs substantially if the two countries can reach a trade deal.
The 145% duties President Trump placed on China this year remain in place for now; he has made exceptions for computers and some consumer electronics.
Beijing indicated that it wants to see a number of steps from the Trump administration before agreeing to any discussions on tariffs.

President Trump yesterday noted that he has no intention of firing Fed Chair Jerome Powell despite his frustration that the Fed is not cutting rates fast enough.
He commented that “it’s a perfect time to lower the rate and would like to see our chairman be early or on time, as opposed to late”.

Minneapolis Fed President Neel Kashkari commented that it is the Fed’s job to ensure that tariffs don’t spur an ongoing inflation problem.
Kashkari believes tariffs will likely be at least somewhat inflationary, but that it is too soon to assess the impact on interest rates.
He noted that the Fed would keep an eye on the labour market for clues as to whether businesses are reducing headcount due to uncertainty.
He currently does not see evidence of widespread layoffs.

Chicago Fed President Austan Goolsbee commented that the Fed should wait for further information on US tariff policy before “jumping to action”.
Goolsbee noted that the central bank does not yet know what the impact of tariffs on supply chains is likely to be.

US new homes sales for March are due out today; a 1.3% m/m increase is expected in March, following a 1.8% m/m increase in February.
Mortgage rates fell at the start of the month and may have encouraged prospective buyers to close on deals.
The latest Beige Book, also due out later today, will likely signal that economic activity has risen very slightly since the end of February.

Locally, the March CPI is in the spotlight today and is expected to come in at 3.0% y/y, from 3.2% y/y in February.
On a m/m basis, CPI is likely to have increased by 0.6% in March, after having increased by 0.9% in February.
Core CPI is expected at 3.2% y/y March, from 3.4% y/y in February.

Brent crude oil is currently at $68.06/bbl; ($67.44/bbl*).
Gold is at $3341/oz ($3393/oz*).
SA CDS 256bps*, Brazil 202bps* and Turkey 334bps*.
Yields: US 10yr at 4.40%*, German bund at 2.44%*, SA 10-year generic at 10.96%*, SA’s R2035 at 10.93%*.

* Denotes yesterday’s close.

Key events and data:

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