In the loop

What you should know this morning:

• The rand is weaker this morning, at R17.97/$, after closing weaker yesterday (R17.80/$*).
• EM currencies were mixed yesterday; the KRW (+0.9%), TWD (+0.9%) and BGN (+0.8%) were the biggest gainers; the RUB (-0.8%), ZAR (-0.7%) and TR (-0.6%) were the biggest losers.
• Asian equity markets the Nikkei, Hang Seng and Shanghai Composite are down.

• ECB Governing Council member Isabel Schnabel yesterday noted that the central bank’s rate-cutting cycle would be coming to an end.
• She noted both inflation and the economy as on track.
• Schnabel expects medium-term inflation to stabilise around the bank’s 2% target.
• Inflation is expected to average 1.9% in 2026 and 2027, “on target”, according to Schnabel.
• Schnabel expects the growth outlook to be “broadly stable” despite the trade conflict brought about by the Trump administration.

• Eurozone industrial production for April, due out today, is likely to have declined as producers rushed to finalize orders in the prior month, fearing higher tariffs.
• Production is likely to have declined by 1.7% m/m in April, after having increased by 2.6% m/m in March.
• On a y/y basis, production is expected to have increased by 1.2% in April, following a 3.6% increase in March.

• President Trump has once again criticised Fed Chair Jerome Powell for not cutting interest rates.
• He noted that the White House might “have to force something”, were the Fed not to reduce borrowing costs.
• President Trump noted, however, that he would not fire Powell ahead of the end of his term in May 2026.
• The Fed will meet next week and is expected to hold rates steady.

• The US University of Michigan sentiment index for June is scheduled for release today.
• The sentiment index is likely to have improved to 53.5 in June, from 52.2 in May.
• The sentiment index will be closely watched for signs of a downtick in long-run inflation expectations.

• Locally, it’s a quiet day as far as data release are concerned

• Oil is up today after Israel launched a series of attacks on Iran’s nuclear facilities and said that it would continue until the threat has been removed.
• Israel has declared a state of emergency in anticipation of a missile and drone attack by Iran.
• Brent crude is up this morning, and up by 1.5% year-to-date.
• The gold price is up this morning, and up by 30.6% year-to-date.

• Brent crude oil is currently at $75.07/bbl; ($69.36/bbl*).
• Gold is at $3427/oz ($3383/oz*).
• SA CDS 189bps*, Brazil 150bps* and Turkey 295bps*.
• Yields: US 10yr at 4.35%*, German bund at 2.47%*, SA 10-year generic at 10.14%*, SA’s R2035 at 10.08%*.

* Denotes yesterday’s close.

Key events and data: 

• 11h00: Eurozone industrial production (April)
• 16h00: US University of Michigan sentiment, 1 yr and 5-10 yr inflation expectations (June)

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