In the loop 27 March 2026

In the loop

Shireen Darmalingam

What you should know this morning:

The rand is stronger this morning, at R17.05/$, after closing weaker yesterday (R17.14/$*).
EM currencies were mixed yesterday; the ARS (+0.6%), TWD (+0.2%) and COP (+0.2%) were the biggest gainers; the ZAR (-1.3%), CLP (-1.3%) and PEN (-1.0%) were the biggest losers.
Asian equity markets are mixed this morning; the Nikkei is down, while the Hang Seng and Shanghai Composite are up.

Iran war: this conflict's global economic impact has deepened, with sustained disruptions to the Strait of Hormuz keeping oil prices elevated above $100/bbl.
This has raised inflation risks worldwide, prompting warnings from institutions such as the OECD and central banks about the impact.
President Trump yesterday said that he has extended his deadline for Iran to reach a deal with the US, adding that talks “are going very well”.
These comments should, however, be viewed with caution, as it reflects more of a strategic signalling effort than clear evidence of substantive progress.
It's been reported that Tehran hadn't sought a pause in strikes.

The OECD yesterday noted that the UK is likely to be among the worst-hit major economies from the Iran war.
It warned that the Britain is particularly exposed to the inflationary and growth-damaging effects of higher energy and commodity prices.
The OECD sharply downgraded UK economic growth for 2026, to 0.7% (from 1.2%), the largest cut among the G7, while raising its inflation projection to about 4% (from 2.5%), also one of the highest in the group.
It argued that the UK's heavy reliance on imported energy makes it more vulnerable than many peers to surging oil and gas prices, which it said would squeeze household incomes.
While the conflict is expected to weigh on global growth more broadly, the OECD stressed that the scale of the downgrade for the UK is notably larger than for other major economies.
It is likely to leave Britain with among the weakest growth and highest inflation outcomes in the advanced world this year.

UK retail sales for February, scheduled for release today, are likely to have increased by 2.1% y/y, down from a 4.5% y/y increase in January.
On a m/m basis, sales are likely to have declined by 0.7% in February, following an increase of 1.8% m/m in January.

ECB Governing Council member Luis de Guindos yesterday commented that the ECB is closely monitoring the economic effects of the Iran war.
He stressed that heightened geopolitical tensions pose significant risks to both growth and price stability.
De Guindos noted that the conflict has driven energy prices sharply higher, creating a supply shock reminiscent of the inflationary surge that followed Russia's invasion of Ukraine in 2022.
He emphasised that the ECB remains unwavering in its commitment to ensuring inflation returns sustainably to its 2% target, while adopting a data-dependent, meeting-by-meeting approach to policy decisions.
He further warned that prolonged disruptions to energy markets and shipping could have far-reaching consequences for the global economy and financial stability.
He added that the scale of the impact would depend on how long the war lasts and whether it spreads further.

Eurozone inflation expectations 3 years ahead are likely to have increased to 2.7% in February, from 2.6% in January.
Inflation expectations for 12 months ahead are expected at 2.8% in February, from 2.6% in January.

Fed policymakers are becoming increasingly concerned about the US economic outlook amid the ongoing Iran war.
Fed Governor Lisa Cook indicated that the surge in oil prices has shifted the balance of risks, with inflation now posing a greater threat than employment.
She noted that, while the labour market remains broadly balanced, it is doing so in a fragile state.
Policymakers including Michael Barr and Philip Jefferson signalled a preference to keep interest rates on hold as they evaluate the war's impact on inflation and economic growth.
Barr also emphasised that tariff-related price pressures might persist longer than previously expected, adding to the inflation outlook.

The final reading of the US University of Michigan consumer sentiment index for March, due for release today, is expected to have deteriorated to 54.0, from the preliminary 55.5 estimate.
This is expected as the Iran war continues to weigh on consumer confidence.
The preliminary data indicated that households anticipated at least a short-term spike in gasoline prices; concerns have intensified as the Iran conflict has deepened.

Brent crude oil is currently at $107.42/bbl; ($108.01/bbl*).
Gold is at $4437/oz ($4376/oz*).
SA CDS 189bps*, Brazil 136bps* and Turkey 292bps*.
Yields: US 10yr at 4.41%*, German bund at 3.07%*, SA 10-year generic at 9.10%*, SA's R2035 at 8.97%*.

* Denotes yesterday's close.

Key events and data:

09h00: UK retail sales (February)
11h00: Eurozone ECB 1 yr and 3 yr inflation expectations (February)
16h00: US University of Michigan sentiment. 1 yr and 5-10 yr inflation expectations (March – final)

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