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In the loop 02 May 2025

In the loop

Shireen Darmalingam

What you should know this morning:

  • The rand is stronger this morning, at R18.45/$, after closing stronger yesterday (R18.59/$*).
  • EM currencies were mixed yesterday; the TRY (+0.1%) and ZAR (+0.1%) were the biggest gainers; the BGN (-0.6%), RON (-0.6%) and PLN (-0.5%) 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 Japan (BOJ) yesterday kept its benchmark interest rate unchanged, at 0.5%.
  • The BOJ pushed back the timing of when it expects inflation to reach its target; it also cut its growth forecast on the back of the US trade war.
  • BOJ Governor Kazuo Ueda noted extremely high uncertainties ahead as reasons for changes in the bank’s forecasts.
  • Japan’s unemployment rate for March increased to 2.5%, at 2.4% in February.
 
  • Eurozone CPI for April is scheduled for release today; CPI is expected to come in at 2.1% y/y in April, from 2.2% y/y in March.
  • Core CPI may have risen to 2.5% y/y in April, from 2.4% y/y in March.
  • The ECB will publish its Economic Bulletin today.
 
  • The US ISM manufacturing index slipped to 48.7 in April, from 49.0 in March.
  • The sector is likely to continue to struggle due to US tariffs and trade policy uncertainty.
  • The US non-farm payrolls (NFP) for April are in the spotlight today and are expected to have increased, by 138k, down from an increase of 228k in March.
  • Gains in payrolls are likely to be centred in construction, supported by good weather and the continued rollout of the Biden-era infrastructure funds.
  • The professional and business services sector is also likely to report gains.
  • The unemployment rate is likely to have remained unchanged, at 4.2%, in April.
 
  • Locally, Finance Minister Enoch Godongwana announced that the third tabling of the Budget would take place on Wednesday 21 May 2025.
  • He noted that Treasury would focus on improving spending discipline across departments, improving both revenue collection and structural reform to stimulate investment and growth.
  • The re-tabling will encompass a full legislative reset: the Fiscal Framework, Appropriation Bill, Division of Revenue Bill, and the previously tabled Rates and Monetary Amounts Bill will all be presented to Parliament for new approval.
 
  • Electricity Minister Dr Kgosientsho Ramokgopa commented yesterday that SA could avoid loadshedding this winter due to returning power units.
  • The minister spoke at the G20 Energy Transitions Working Group in Cape Town and expressed that improved electricity generation and the return of key power units could mean a much more stable power supply this winter.
  • He added that several big power units will be back online this winter.
  • The minister highlighted that performance levels are not expected to dip below last year’s — and may even improve.
  • A comprehensive winter energy outlook will be released on Monday 5 May.
 
  • The BER manufacturing PMI for April is due for release today; the index increased to 48.7 in March, from 44.7 in February.
  • The April Naamsa vehicle sales are also due; vehicle sales are expected to have increased by 5.0% y/y in April, after having increased by 12.5% y/y in March.
 
  • The oil price fell to a four-year low yesterday on the back of the slowing US economy and Saudi Arabia reporting that it is prepared to weather a prolonged period of low prices.
  • Brent crude is up this morning, and down by 14.7% year-to-date.
  • The gold price is up this morning, and up by 23.8% year-to-date.
 
  • Brent crude oil is currently at $62.46/bbl; ($62.13/bbl*).
  • Gold is at $3254/oz ($3219/oz*).
  • SA CDS 242bps*, Brazil 182bps* and Turkey 359bps*.
  • Yields: US 10yr at 4.21%*, German bund at 2.44%**, SA 10-year generic at 10.61%**, SA’s R2035 at 10.57%**.
 

* Denotes yesterday’s close.

** Denotes Wednesday’s close.

Key events and data: 

  • 10h00: Eurozone ECB publishes Economic Bulletin, HCOB manufacturing PMI (April – final)
  • 11h00: Eurozone CPI (April), unemployment rate (March)
  • 11h00: SA BER manufacturing PMI (April)
  • 14h30: US non-farm payrolls (April), unemployment rate (April)
  • 16h00: US factory orders (March), durable goods orders (March – final)
  • SA Naamsa vehicles sales (April)
 

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