In the loop 08 April 2025

In the loop

Shireen Darmalingam

What you should know this morning:

The rand is stronger this morning, at R19.51/$, after closing weaker yesterday (R19.63/$*).
EM currencies were mixed yesterday; the TWD (+0.1%) and HKD (+0.1%) were the biggest gainers; the COP (-2.5%), ZAR (-2.5%) and RUB (-1.9%) were the biggest losers.
Asian equity markets the Nikkei, Hang Seng and Shanghai Composite are up.

Several ECB policymakers are due to speak on this regional economy and monetary policy later today.
Many have already expressed their concern over sweeping US tariffs and the impact that could be felt in the region and the global economy.
European Commission (EC) President Ursula von der Leyen noted that the EU remains committed to negotiating over US tariffs.
The EU, however, stands ready to defend its interests with “proportionate countermeasures”, if need be.
Under Trump’s tariffs, the EU will be subjected to 20% tariffs on exports to the US.
The EU trade commissioner yesterday noted that, while the “EU remains open and prefers negotiations, we will not wait endlessly”.

President Trump yesterday threatened to impose additional 50% import taxes on China if it fails to withdraw its planned retaliatory tariffs today.
This 50% charge would come on top of the 34% duty the president has imposed on all Chinese imports.
The Chinese Ministry of Commerce commented that the tariff escalation threat is a “mistake” and that China will fight it to the end.
President Trump also noted that the Trump administration is preparing for negotiations with Japan and Israel.

The US NFIB small business optimism index for March is likely to have slipped to 99.0, from 100.7 in February.
The small business economic trends survey, which came ahead of the optimism index, saw job creation plans for the next three months fall for a second consecutive month in March.
NFIB noted that “economic growth appears to be slowing, but at a slow pace”.

Canadian business sentiment deteriorated in Q1:25 to -2.14, from -1.16 in Q4:24.
The Bank of Canada survey revealed that firms believe that the upward price pressures from the trade war with the US will exceed the downward pull from weaker demand.
This is threatening to undo the progress that the central bank has made on keeping inflation expectations well anchored.
The central bank will meet next week; policymakers are weighing whether to pause their easing cycle or cut interest rates for an eighth straight meeting.

Brent crude oil is currently at $65.01/bbl; ($64.21/bbl*).
Gold is at $3000/oz ($2970/oz*).
SA CDS 289bps*, Brazil 204bps* and Turkey 364bps*.
Yields: US 10yr at 4.14%*, German bund at 2.61%*, SA 10-year generic at 11.13%*, SA’s R2035 at 11.11%*.

* Denotes yesterday close.

Key events and data:

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