In the loop 19 May 2026

In the loop

Shireen Darmalingam

What you should know this morning:

The rand is weaker this morning, at R16.64/$, after closing weaker yesterday (R16.61/$*).
EM currencies were mixed yesterday; the BRL (+1.3%), CLP (+0.9%) and HUF (+0.5%) were the biggest gainers; the IDR (-1.1%), RON (-0.5%) and MYR (-0.5%) 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: President Trump has indicated that he is holding off on Iran strikes today in response to a request from allies in the Arabian Gulf.

G7 meeting: the Iran conflict featured prominently in discussions.
US Treasury Secretary Scott Bessent said that he would urge G7 partners to strengthen sanctions enforcement against Iran and tighten restrictions on financial flows linked to Tehran's military activities.
German officials argued that the G7 remains the appropriate forum to coordinate efforts aimed at ending the conflict and managing its economic fallout.
The meeting additionally highlighted growing concern over debt vulnerabilities in both advanced and developing economies.
Officials discussed how rising borrowing costs are increasing fiscal pressures globally, particularly in low-income countries.

The IMF yesterday upgraded its UK growth forecast for 2026 to 1.0%, from a previous estimate of 0.8%.
The Fund noted that, while the UK economy has remained resilient in recent years, the war in the Middle East is weighing on the near-term outlook.
It added that the British economy is expected to “gradually recover as the shock dissipates”.
The IMF warned that higher energy prices are likely to push inflation higher temporarily and delay the return of inflation to the BOE's 2% target by around a year.
It stated that, “under the current energy price outlook, holding rates steady for the remainder of the year should be sufficient to bring inflation back to target by end-2027”.
However, the IMF also suggested that the BOE should remain prepared to cut interest rates if conditions warrant additional support.

The UK March labour market data will be released today, with y/y regular private sector pay growth in the three months to March expected to have moderated to 3.1% y/y, from 3.2% y/y in the three months to February.
The ILO unemployment rate for the three months to March is expected to have remained unchanged, at 3.9%.
The Eurozone trade balance for March is also on the cards today.

US NAHB housing market index rose to 37 in May, from 34 in April, exceeding market expectations.
However, it remained well below the neutral 50 threshold, indicating that the majority of builders still view conditions as weak.
Nonetheless, the improvement was broad-based across the survey's key components.
The index measuring current sales conditions increased to 40 in May, while sales expectations over the next six months rose to 45, suggesting a somewhat more constructive outlook.
The index tracking prospective buyer traffic also improved to 25 in May, though it remained the weakest component, highlighting soft demand.

Chicago Fed President Austan Goolsbee noted that inflation needs to remain “front of mind” as Kevin Warsh begins his term as Fed Chair.
Goolsbee noted that the recent rise in inflation, driven in part by tariffs and higher energy prices linked to the Iran conflict, means that the Fed cannot afford to become complacent about price stability.
He stressed that maintaining credibility on inflation would be critical for the central bank under Warsh's leadership, even as political pressure for lower interest rates intensifies.

Brent crude oil is currently at $110.28/bbl; ($112.10/bbl*).
Gold is at $4536/oz ($4566/oz*).
SA CDS 151bps*, Brazil 123bps* and Turkey 244bps*.
Yields: US 10yr at 4.58%*, German bund at 3.14%*, SA 10-year generic at 8.99%*, SA's R2035 at 8.82%*.

* Denotes yesterday's close.

Key events and data:

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