In the loop

What you should know this morning:

• The rand is stronger this morning, at R18.13/$, after closing weaker yesterday (R18.14/$*).
• EM currencies were mixed yesterday; the MXN (+0.3%), PHP (+0.2%) and PLN (+0.1%) were the biggest gainers; the TRY (-0.2%), TWD (-0.1%) and KRW (-0.1%) were the biggest losers.
• Asian equity markets are mixed this morning; the Nikkei and Hang Seng are up, while the Shanghai Composite is down.

• China’s CPI for June came in at 0.2% y/y, from 0.3% y/y in May.
• PPI for June came in at -0.8% y/y, from -1.4% y/y in May.

• The Reserve Bank of New Zealand (RBNZ) today kept its benchmark interest rate unchanged, at 5.5%, for an 8th consecutive month.
• The RBNZ signalled that it might ease monetary policy sooner than previously expected.

• Fed Chair Jerome Powell, in his semi-annual monetary policy report to the Senate Banking Committee, left the Fed’s options open on when the central bank might cut the Fed funds rate.  
• Markets are pricing this in as likely in September.
• He told the committee that he “is not going to be sending any signals about the timing of future actions”.
• Powell noted that the Fed faces a cooling labour market as well as persistently high prices. 
• He reiterated that the central bank would make its calls “meeting by meeting”.
• Powell is due to deliver the testimony to the House Financial Services Committee today.

• Markets are awaiting the US June CPI data, scheduled for release tomorrow.
• CPI is likely to come in at 3.1% y/y in June, from 3.3% y/y in May.
• On a m/m basis, headline CPI is likely to have increased by 0.1% in June, after having stagnated in May.

• Locally, Eskom yesterday announced that it had imposed localized rolling blackouts known as "load reduction”.
• Load reduction is implemented in specific areas with sufficient available electricity but with a transformer's integrity at risk due to overloading.
• These power cuts “will help protect transformers from overloading linked to electricity theft”.
• However, Eskom noted that nationwide loadshedding remains suspended.

• Brent crude is down this morning, and up by 9.5% year-to-date.
• The gold price is up this morning, and up by 14.8% year-to-date.

• Brent crude oil is currently at $84.39/bbl; ($84.66/bbl*).
• Gold is at $2368/oz ($2357/oz*).
• SA CDS 201bps*, Brazil 154bps* and Turkey 260bps*.
• Yields: US 10yr at 4.29%, German bund at 2.58%*, SA 10-year generic at 10.96%*, SA’s R2030 at 9.78%*.

* Denotes yesterday’s close.

Key events and data:

• 13h00: US MBA mortgage applications (5 July)

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