In the loop 19 March 2026

In the loop

Shireen Darmalingam

What you should know this morning:

The rand is weaker this morning, at R16.97/$, after closing weaker yesterday (R16.81/$*).
EM currencies were mixed yesterday; the PHP (+0.5%), TWD (+0.2%) and MYR (+0.1%) were the biggest gainers; the RUB (-1.7%), BRL (-1.4%) and CLP (-1.2%) were the biggest losers.
Asian equity markets the Nikkei, Hang Seng and Shanghai Composite are down.

Iran war: Day 19 of this war saw the conflict escalate further both militarily and politically, with no signs of de-escalation.
Iran issued a strong message of retaliation following the killing of senior figures, underscoring a hardened stance as leadership signalled continued resistance.
The war has amplified fears over regional stability and disruptions to global oil supply.

Central bank watch: the US FOMC kept the Fed funds rate unchanged yesterday, as expected, at 3.50-3.75%.
The FOMC extended its pause as policymakers grapple with conflicting economic signals.
Inflation expectations were revised higher on the back of surging energy prices linked to the Iran war, while the labour market showed signs of softening,
The decision to hold was not unanimous, with one member dissenting in favour of a rate cut, highlighting internal divisions.
Despite the more uncertain outlook, the Fed maintained guidance that only one rate cut is likely in 2026.
Fed Chair Jerome Powell highlighted a cautious “wait-and-see” stance as geopolitical risks cloud the trajectory for inflation and economic activity.

The Bank of Canada also held its policy rate steady at 2.25% yesterday, reflecting a similar balancing act between weak domestic growth and rising inflation risks.
While inflation had recently moderated close to the 2% target, policymakers flagged that sharply higher oil prices could push inflation higher in the near term.
The central bank emphasised caution, signalling that it is prepared to raise rates if energy-driven inflation becomes entrenched.

The BOJ today kept its benchmark interest rate unchanged, at 0.75%.
This decision reflects a cautious stance amid heightened global uncertainty, particularly the inflationary impact of rising energy prices.
Policymakers acknowledged that underlying inflation is gradually moving towards the bank's 2% target, supported by moderate wage growth.
The central bank signalled that further tightening remains likely later in 2026 if inflation and wage dynamics continue to improve.

The BOE is largely expected to keep rates unchanged today and is expected to signal that the balance of risks to its inflation outlook are tilted to the upside.
The ECB too is expected to keep its benchmark interest rate unchanged today.
ECB President Christine Lagarde is likely to adopt a measured tone, emphasising the bank's readiness to act, if necessary, while signalling no immediate urgency to adjust rates.

The UK labour market data for January is scheduled for release today and is expected to continue pointing to a gradual loosening in labour market conditions.
The unemployment rate is expected to have increased to 5.3% in the three months to January, from 5.2% in the three months to December.

The US new home sales data is likely to show a decline in February, as mortgage rates stabilised during the first half of the month after several months of declines.
New homes sales are likely to have fallen by 2.7% m/m in February, following a 1.7% m/m retreat in January.
The leading index is expected to have declined by 0.1% m/m in February, after having declined by 0.2% m/m in January.

The oil price rose after attacks on some of the Middle East's most important energy facilities, raising concerns of a more severe impact from the conflict.
Brent crude is up this morning, and up by 83.6% year-to-date.
The gold price is up this morning, and up by 12.1% year-to-date.

Brent crude oil is currently at $111.77/bbl; ($107.38/bbl*).
Gold is at $4840/oz ($4818/oz*).
SA CDS 169bps*, Brazil 135bps* and Turkey 275bps*.
Yields: US 10yr at 4.26%*, German bund at 2.94%*, SA 10-year generic at 9.07%*, SA's R2035 at 8.94%*.

* Denotes yesterday's close.

Key events and data:

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