In the loop 02 June 2026

In the loop

Shireen Darmalingam

What you should know this morning:

The rand is stronger this morning, at R16.25/$, after closing weaker yesterday (R16.31/$*).
EM currencies were mixed yesterday; the COP (+3.7%) and BRL (+0.2%) were the biggest gainers; the RUB (-1.6%), ARS (-1.2%) and HUF (-0.8%) were the biggest losers.
Asian equity markets are mixed this morning; the Nikkei and Shanghai Composite are down, while the Hang Seng is up.

Iran war: Iran has suspended negotiations and communications with the US via mediators, citing Israel's expanding offensive in Lebanon as a breach of ceasefire conditions.
Tehran warned that continued attacks on Lebanon could trigger direct confrontation, or the opening of new fronts, underscoring rising escalation risks.
Despite ongoing tensions, President Trump said that discussions over an interim peace agreement between the US and Iran were expected to “work out well”.

BOE Governor Andrew Bailey yesterday said that the BOE is paying closer attention to public sector wage growth as a possible source of inflationary pressure.
He noted that pay increases in the public sector continue to outpace those in the private sector.
Historically, the BOE has placed greater emphasis on private sector wage growth as this tends to respond quickly to shifts in economic conditions and is more likely to feed through into higher prices charged by businesses.
Public sector wages rose by 4.8% y/y in Q1:26, compared with a 3.0% y/y increase in private sector pay.

The Eurozone CPI report for May is on the cards today.
Higher fuel costs are expected to push headline inflation higher, while household energy bills are also likely to contribute to the increase.
The extent to which rising gas prices are feeding through into broader inflation remains a major uncertainty.
Headline CPI is expected to rise to 3.2% y/y in May, from 3.0% y/y in April.
The data will be particularly important as it represents the final inflation reading ahead of the ECB's June policy meeting and is likely to be closely scrutinised by policymakers.

The US ISM manufacturing activity remained in expansion in May; the index increased to 54.0 (the strongest reading in over three years) in May, from 52.7 in April.
The increase was supported by stronger growth in new orders and output, with the new orders index climbing further into expansion and production also improving.
Price pressures, however, remained elevated; the index remains high despite a modest decline in May, pointing to ongoing input cost inflation.
Labour market conditions in manufacturing continued to lag; the employment index remained below the 50pt benchmark, albeit improving from April.
Inventories remained broadly subdued and supplier deliveries continued to slow in May.
Overall, the report suggests a strengthening manufacturing backdrop driven by demand and production, but with persistent cost pressures and only gradual improvement in hiring dynamics.

The US JOLTS job openings data for April, due for release today, likely remained unchanged at 6.866 million in April.
The data comes ahead of the non-farm payrolls (NFP) for May, which are scheduled for release on Friday.
NFP are expected to have increased by 85k, after having increased by 115k in April.
The unemployment rate is likely to have remained unchanged, at 4.3%.

Locally, the BER will release the business confidence index for Q2:26 today; the index rose to 47 in Q1:26, from 44 in Q4:25.

Oil prices rose yesterday after Iran announced that it would suspend talks with the US, raising doubts about the prospects for renewing the ceasefire.
Tehran said it would halt “talks and the exchange of documents through mediators” in response to Israel's assault in Lebanon.
Brent crude is down this morning, and up by 54.7% year-to-date.
The gold price is up this morning, and up by 4.7% year-to-date.

Brent crude oil is currently at $94.19/bbl; ($94.98/bbl*).
Gold is at $4522/oz ($4484/oz*).
SA CDS 130bps*, Brazil 119bps* and Turkey 241bps*.
Yields: US 10yr at 4.45%*, German bund at 3.00%*, SA 10-year generic at 8.70%*, SA's R2035 at 8.51%*.

* Denotes yesterday's close.

Key events and data:

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