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In the loop 20 August 2026

In the loop

Shireen Darmalingam

What you should know this morning:

  • The rand is steady this morning, at R16.10/$, after closing stronger yesterday (R16.10/$*).
  • EM currencies were mixed yesterday; the COP (+1.9%), KRW (+1.7%) and HUF (+1.4%) were the biggest gainers; the ARS (-0.2%), INR (-0.1%) and PHP (-0.1%) were the biggest losers.
  • Asian equity markets the Nikkei, Hang Seng and Shanghai Composite are up.
 
  • Iran war: President Trump yesterday announced plans to launch what he called an “economic D-day” against Iran, reflecting mounting frustration over Tehran's refusal to capitulate. 
  • Trump warned that countries providing Iran with a “lifeline” would face “tremendous economic consequences”, putting particular focus on China, the largest buyer of Iranian oil. 
  • The move signals a shift towards intensifying economic pressure after the US military campaign failed to enforce Iran's surrender, with Trump seeking international support to further isolate and weaken Tehran.
 
  • Central bank watch: the minutes of the US FOMC July meeting noted that policymakers have become increasingly concerned about persistent inflation, while the labour market remained broadly stable. 
  • The FOMC kept the Fed funds rate unchanged at 3.50%–3.75%, although three members dissented in favour of a 25bps hike.
  • Several policymakers argued that further tightening could be warranted if inflation failed to move convincingly towards the Fed's 2% target. 
  • Policymakers noted that supply shocks and the Middle East conflict posed additional upside risks, and they discussed whether recent price increases were temporary or indicative of broader inflationary pressures. 
  • With employment conditions still relatively solid, the Fed appeared to have greater focus on restoring price stability.
  • Chair Kevin Warsh also sought the Committee's views on reducing the number of annual FOMC meetings from eight to six. 
  • This would allow two full months of data to accumulate between meetings; no decision was taken, and the 2026 schedule will remain unchanged. 
  • Overall, the minutes struck a hawkish tone, signalling that the Fed remained prepared to tighten policy if inflationary pressures persisted.
 
  • The Swedish Riksbank is expected to keep its benchmark interest rate unchanged today.
 
  • ECB President Christine Lagarde yesterday noted that Europe cannot afford to miss out on the artificial intelligence revolution.
  • She warned that the region risks repeating the mistakes of the first digital revolution, when many of the economic gains from advances in information and communication technologies accrued elsewhere.
  • Lagarde further argued that, while European firms are investing heavily in AI, fragmented capital and product markets continue to hinder their ability to scale up and compete globally.
  • She noted that the result is fewer firms growing to global size and a slower diffusion of new technologies across the economy.
  • Lagarde stressed that Europe must leverage its strengths, including its skilled workforce, industrial capabilities, and large single market, to compete in AI and other emerging technologies.
 
  • The US leading indicator July, due out today, is expected to have increased by 0.1% m/m, following a 0.2% m/m decline in June.
 
  • US Treasury yields fell sharply yesterday after the Treasury Department announced plans to at least double the size of its liquidity support buybacks for longer-dated government debt.
  • The maximum size of buybacks in the 10-20-year and 20-30-year sectors will rise from $2bn to at least $4bn per operation from 9 September through to 4 November. 
  • Treasury said the expansion is intended to provide greater liquidity support in longer-dated securities. 
  • The announcement drove long-term yields sharply lower and contributed to a more than 3% rise in the gold price. 
 
  • Locally, it's a quiet day as far as data releases are concerned.
 
  • Brent crude is up this morning, and up by 50.7% year-to-date.
  • The gold price is down this morning, and up by 3.8% year-to-date.
 
  • Brent crude oil is currently at $91.67/bbl; ($91.62/bbl*).
  • Gold is at $4483/oz ($4515/oz*).
  • SA CDS 120bps*, Brazil 125bps* and Turkey 220bps*.
  • Yields: US 10yr at 4.63%*, German bund at 3.26%*, SA 10-year generic at 8.65%*, SA's R2035 at 8.44%*.
 

* Denotes yesterday's close. 

Key events and data:

  • 16h00: US leading index (July)
 

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