In the loop 30 April 2025

In the loop

Shireen Darmalingam

What you should know this morning:

The rand is stronger this morning, at R18.53/$, after closing weaker yesterday (R18.55/$*).
EM currencies were mixed yesterday; the ARS (+1.1%), MYR (+0.9%) and THB (+0.8%) were the biggest gainers; the CLP (-0.3%), INR (-0.3%) and PLN (-0.2%) were the biggest losers.
Asian equity markets are mixed this morning; the Nikkei and Hang Seng are up, while the Shanghai Composite is down.

Central bank watch: the Bank of Thailand is expected to cut its benchmark interest rate today.

China’s manufacturing PMI deteriorated in April and slipped to 49.0, from 50.5 in March.
Both the non-manufacturing and composite PMIs also deteriorated in April but remained in expansion.
China’s Caixin manufacturing PMI also declined in April, to 50.4, from 51.2 in March.
The slippage reveals the initial damage of President Trump’s tariffs programme.

Eurozone GDP for Q1:25 is in the spotlight today; the data is expected to show that the economy expanded by 0.2% q/q in Q1:25, matching Q4:24’s increase.
The economic recovery may be affected by US tariff threats.
ECB Governing Council member Yannis Stournaras yesterday noted that the central bank should proceed carefully with additional interest rate cuts on the back of the uncertain global environment.
An interest rate cut at the June policy meeting is largely expected as US tariffs threaten to derail economies around the world and impact inflation in the Eurozone.
He added that downside risks to Eurozone growth remain “significant”.
Stournaras also remarked that “diverging inflation and growth prospects across countries heighten uncertainty and make monetary policymaking more complex”.

The US Q1:25 GDP is expected to contract 0.2% q/q (annualised), from a 2.4% q/q (annualised) increase in Q4:24.
The trade deficit is expected to have been the biggest drag, as businesses front-loaded goods imports ahead of the tariff surge.
Personal income and spending for March are due out today.
Personal income is expected to have increased by 0.4% m/m in March, after having increased by 0.8% m/m in February.
Personal spending is likely to have increased by 0.6% m/m in March, after having increased by 0.4% m/m in February.
The core PCE deflator is expected to have increased by 0.1% m/m in March, following a 0.4% m/m increase in February.

The US private sector ADP employment report for April, a precursor to the non-farm payrolls (NFP) report, is scheduled for release today.
Private sector payrolls are likely to have increased by 115k in April, from 155k in March.
NFP, due out on Friday, likely increased by 135k in April, from 228k in March.

US President Donald Trump yesterday renewed his criticism of Fed Chair Jerome Powell at an event to mark his 100 days in office.
Trump also defended his economic policies and said that his sweeping tariffs programme would inspire a wave of economic growth and lure manufacturers back to the US.
Just prior to the rally, Trump signed directives easing the impact of his auto tariffs and to offer companies time to move their manufacturing back to the US.
He also issued a warning to automakers who might still look to import parts.

Locally, the M3 and private sector credit extension (PSCE) for March are scheduled for release today.
PSCE is likely to come in at 2.7% y/y in March, from 3.68% y/y in February.
Year-on-year growth is likely to have been suppressed by strong adverse base effects.
The monthly budget balance data for March is also on the cards; the budget surplus was at R24.2bn in February.
The March trade balance is also scheduled for release; a trade surplus of R14.9bn is expected, from R20.9bn in February.
This improvement to R20.9bn in February was partly owing to a spike in precious metals exports, which may well be a key determinant of the outcome in March as well.
We will focus rather on the momentum in imports, which were exceedingly weak last year, with tentative signs recently of a recovery.
Persistent weakness may bode ill for the economic recovery that we foresee, particularly in fixed investment.

Brent crude oil is currently at $63.50/bbl; ($64.25/bbl*).
Gold is at $3314/oz ($3328/oz*).
SA CDS 228bps*, Brazil 183bps* and Turkey 355bps*.
Yields: US 10yr at 4.17%*, German bund at 2.49%*, SA 10-year generic at 10.63%*, SA’s R2035 at 10.59%*.

* Denotes yesterday’s close.

Key events and data:

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