In the loop

What you should know this morning:

• The rand is trading at R16.24/$ this morning, after closing stronger on Friday (R16.25/$*).
• EM currencies were mixed on Friday; the MYR (+0.4%), TWD (+0.3%) and CNY (+0.1%) were the biggest gainers; the KRW (-0.5%), COP (-0.5%) and HUF (-0.3%) were the biggest losers.
• Asian equity markets, the Nikkei, Hang Seng and Shanghai Composite, are up this morning.

• Iran war: Iran has warned that it would retaliate “without limitations” if the US launches new strikes, while Qatar intensified mediation efforts to revive negotiations and prevent a renewed escalation.
• Tehran outlined conditions for re-engaging in talks with Washington through Qatari intermediaries, signalling that diplomacy remains active despite the ongoing conflict.
• Fighting continued to intensify in Yemen and the Red Sea, with growing regional efforts to protect shipping routes and contain the wider fallout.

• Central bank watch: the SARB's MPC will meet this week, with their announcement of their decision on rates on Wednesday afternoon.
• The bank kept the policy rate unchanged at their July meeting after raising rates by 25 bps in May.
• The inflation outlook has worsened since July, with the major risk – protracted conflict in the Middle East keeping oil prices elevated – materialising.
• Globally, major central banks have opted to hike rates given more persistent pressure on inflation.
• The likelihood of a 25 bps hike at this week's MPC meeting has risen notably, although it could still be a close call.
• The lack of clear evidence of second-round impacts of the supply shock on broader inflation or inflation expectations could provide room to look through the latest resurgence in oil and fuel prices.
• A range of Fed and ECB policymakers are due to speak throughout this week.

• The US is hosting China for a summit this week, the first since President Xi visited the US in 2017 shortly before Trump started his first term as president.
• The summit follows President Trump's state visit to Beijing four months ago.
• A range of issues, including AI, Taiwan, Iran and the possibility of extending the one-year trade war truce signed last October, are due to be discussed.
• The high-stakes summit will see Trump welcoming Xi on Wednesday, ahead of talks on Thursday.

• UK house prices rose on a m/m basis in September, according to Rightmove.
• House prices increased 0.7% m/m, after having declined by 2.0% in August.
• In y/y terms, house prices were still down 0.8% in September; house prices recorded -1.0% y/y in August.
• The national average asking price stood at £367,440 in September.
• London house prices were up 1.8% m/m in September, reaching £657,775; in y/y terms, London house prices are down 2.6% in September.

• A key focus this week will be the release of PMI data for September, mostly on Wednesday.
• The UK's S&P Global composite PMI is expected to have remained in expansionary terrain, but might have softened slightly to 52.0 in September, from 52.5 in August.
• The US S&P Global composite PMI is also seen softer at 54.7 in September, from 56.0 in August.
• Eurozone activity likely similarly decelerated, with the region's S&P Global composite PMI expected at 51.8 in September, down from 52.0 in August.
• Both manufacturing and services activity is seen to have decelerated slightly in these key markets.
• Eurozone consumer confidence for September is due out on Tuesday.
• Consumer confidence is expected to have remained at a relatively low level, with the index likely dipping marginally, to -16.0 from -15.5 in August.

• Locally, tomorrow will see the release of the SARB's business cycle indicators for July.
• The leading indicator dipped to 116.6 in June, from 118.2 in May.
• CPI inflation for August is due out on Wednesday morning.
• CPI likely accelerated slightly to around 4.5% y/y in August, from 4.3% y/y in July.
• In m/m terms, CPI likely rose around 0.1% in August after increasing 0.2% in July.
• Core inflation is expected to remain in the region of 4.2% y/y in August.
• The SARB's MPC decision on the policy rate on Wednesday afternoon will be the key focus this week.

• Brent crude is down this morning, and up by 67.7% year-to-date.
• The gold price is down this morning, and up by 0.9% year-to-date.

• Brent crude oil is currently at $102.04/bbl; ($103.87/bbl*).
• Gold is at $4357/oz ($4379/oz*).
• SA CDS 115bps*, Brazil 111bps* and Turkey 233bps*.
• Yields: US 10yr at 5.00%*, German bund at 3.52%*, SA 10-year generic at 8.88%*, SA's R2035 at 8.67%*.

* Denotes Friday's close.

Key events and data:

• 14h30: US Chicago Fed activity index (August)

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