In the loop 15 May 2025

In the loop

Shireen Darmalingam

What you should know this morning:

The rand is weaker this morning, at R18.27/$, after closing stronger yesterday (R18.24/$*).
EM currencies were mixed yesterday; the COP (+0.9%), KRW (+0.9%) and MYR (+0.8%) were the biggest gainers; the RUB (-0.7%), ARS (-0.6%) and BRL (-0.5%) were the biggest losers.
Asian equity markets the Nikkei, Hang Seng and Shanghai Composite are down.

The UK GDP for Q1:25 is expected to have increased 0.6% q/q, after having increased 0.1% q/q in Q4:24.
This increase is expected on the back of a boost in manufacturing output due to industries sensitive to US demand ramping up production in anticipation of a spike in spending before the implementation of US tariffs.
Monthly GDP for March, also on the cards today, is expected to have flatlined, following a 0.5% m/m increase in February.
Industrial production for March is largely expected to have declined by 0.5% m/m, after a 1.5% m/m increase in February.

Eurozone industrial production for March is scheduled for release today.
Production is expected to have received a temporary boost in March due to producers rushing to beat the introduction of US tariffs.
Looking ahead, a decline is expected in April as the effect unwinds amidst a poorer outlook for the Eurozone economy.

Fed Vice Chair Philip Jefferson commented that tariffs are likely to increase inflation.
There is however still uncertainty about the magnitude and duration of the impact.
Jefferson added that monetary policy is well positioned to deal with whatever scenario plays out.
Jefferson noted that the heightened precariousness of US government policy, particularly trade, has prompted him to lower his outlook for economic growth in 2025.
While he expects the economy to expand, he cautioned that tariffs could interrupt progress on inflation.
This could “generate at least a temporary rise in inflation”.

US PPI for April is expected at 2.5% y/y, from 2.7% y/y in March.
On a m/m basis, PPI is expected to have increased by 0.2% in April, after having declined by 0.4% in March.
The Empire manufacturing survey for May is also due out today; trade uncertainty is likely to have crimped sentiment in May.
This index is expected to have remained in negative territory in May, it -8.0, from -8.1 in April.
The US NAHB housing market index for May is on the cards; builder confidence for newly built single-family homes likely held steady in May.
The index was up in April as current sales conditions rose and traffic for prospective buyers increased slightly.
Retail sales likely stagnated m/m in April, following an upwardly revised 1.5% m/m increase in March.
The stagnation in April is expected as front-loaded purchases are expected to have eased, while gas prices fell in April.

Locally, mining production for March is due out today; production is expected to have declined by 4.6% y/y in March, following a 9.6% y/y decline in February.
On a m/m basis, production is expected to have increased by 2.3% in March, after having declined by 4.4% m/m in February.

Brent crude oil is currently at $64.56/bbl; ($66.09/bbl*).
Gold is at $3141/oz ($3188/oz*).
SA CDS 207bps*, Brazil 163bps* and Turkey 303bps*.
Yields: US 10yr at 4.53%*, German bund at 2.69%*, SA 10-year generic at 10.58%*, SA’s R2035 at 10.53%*.

* Denotes yesterday’s close.

Key events and data:

08h00: Japan machine tool orders (April)
08h00: UK GDP (Q1:25), monthly GDP (March), industrial production (March), manufacturing production (March), visible trade balance (March)
11h00: Eurozone GDP (Q1:25), industrial production (March), employment (Q1:25)
11h30: SA mining production (March)
14h30: US Empire manufacturing (May), retail sales (April), initial jobless claims (10 May)
15h15: US industrial production (April), capacity utilisation (April), manufacturing production (April)
16h00: US business inventories (March), NAHB housing market index (May)

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