In the loop

What you should know this morning:

• The rand is weaker this morning, at R17.90/$, after closing weaker yesterday (R17.89/$*).
• EM currencies were largely down yesterday; the RUB (-2.5%), PLN (-1.6%) and HUF (-1.4%) were the biggest losers.
• Asian equity markets the Nikkei, Hang Seng and Shanghai Composite are down.

• President Trump yesterday noted that he would shorten his timeline for Russia to reach a truce with Ukraine — or it would face potential economic penalties.
• He indicated a new deadline of about 10 or 12 days.
• Trump is likely to impose secondary sanctions should Russia not reach a truce with Ukraine.

• The US and China resumed trade negotiations yesterday.
• The talks are aimed at extending their tariff truce beyond the mid-August deadline.
• China is also hoping to maintain trade ties while safeguarding economic security.
• The agenda includes issues such as US levies tied to fentanyl trafficking and Chinese purchases of sanctioned Russian and Iranian oil.

• Eurozone inflation expectations 3 years ahead are likely to have remained unchanged, at 2.4%, in June.
• Inflation expectations for 12 months ahead came in lower, at 2.8% in in May, from 3.1% in April.
• ECB President Christine Lagarde last week remarked that the ECB is in “good place” with regard to inflation.
• The ECB’s projections point to inflation stabilising at the target in the medium term.
• The central bank kept its benchmark interest rates steady last week.

• The US labour data is in focus this week.
• The JOLTS job openings for June are on the cards today and are likely have declined to 7.5m, from 7.769m in May.
• The non-farm payrolls (NFP) for July, in the spotlight on Friday, are expected to have increased, by 109k, but still down from an increase of 147k in June.
• The unemployment rate is likely to have to have increased 4.2% in July, from 4.1% in June.

• US housing data will also be released today.
• The S&P CoreLogic house price index is likely to have increased by 2.9% y/y in May, after having increased by 3.4% y/y in April.
• Price increases are likely to remain in the low single digits this year as affordability remains a problem.
• The FHFA house price index for May, also due out today, likely declined by 0.2% m/m, following a 0.1% m/m decline in April.
• Consumer confidence likely improved in July after respondents in the latest University of Michigan survey saw less chance of losing their jobs.
• The US Conference Board consumer sentiment index for July is expected to have increased to 96.0, from 93.0 in June.

• Locally, the M3 and private sector credit extension (PSCE) for June are scheduled for release today.
• PSCE is likely to come in at 4.39% y/y in June, from 4.98% y/y in May. 
• M3 money supply increased by 6.86% y/y in May.

• Brent crude is down this morning, and down by 6.3% year-to-date.
• The gold price is up this morning, and up by 26.4% year-to-date.

• Brent crude oil is currently at $69.96/bbl; ($70.04/bbl*).
• Gold is at $3316/oz ($3314/oz*).
• SA CDS 183bps*, Brazil 149bps* and Turkey 276bps*.
• Yields: US 10yr at 4.40%*, German bund at 2.68%*, SA 10-year generic at 9.87%*, SA’s R2035 at 9.79%*.

* Denotes yesterday’s close.

Key events and data: 

• 08h00: SA M3 money supply (June), PSCE (June)
• 10h00: Eurozone ECB 1 yr and 3 yr inflation expectations (June)
• 10h30: UK consumer credit (June), M4 money supply (June)
• 14h30: US advance goods trade balance (June)
• 15h00: US FHFA house price index (May), S&P CoreLogic house price index (May)
• 16h00: US JOLTS job openings (June), Conference Board consumer confidence (July)

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