In the loop 04 September 2026

In the loop

Shireen Darmalingam

What you should know this morning:

The rand is stronger this morning, at R15.97/$, after closing stronger yesterday (R15.99/$*).
EM currencies were mixed yesterday; the HUF (+2.1%), THB (+1.0%) and RUB (+0.8%) were the biggest gainers; the BRL (-0.3%) and TWD (-0.1%) were the biggest losers.
Asian equity markets the Nikkei, Hang Seng and the Shanghai Composite are up.

Iran war: prospects for renewed negotiations remain limited.
Market concerns over potential supply disruptions have remained elevated, which has kept oil prices high.

BOE Chief Economist Huw Pill yesterday said that he favours a prompt increase in the interest rate to 4% from the current 3.75% to prevent inflation pressures from becoming more persistent.
However, he stressed that such a move would not necessarily mark the start of a prolonged or aggressive tightening cycle.
Pill argued that acting early could help contain second-round effects from higher energy prices linked to the Iran conflict and reduce the risk that the BoE may be forced to raise rates more aggressively later.
He cautioned that delaying action while waiting for greater clarity could allow temporary inflation pressures to become embedded in wages and prices.
Pill was among three MPC members who voted for a rate increase in July, although the majority opted to keep rates unchanged while assessing the longer-term inflation impact of the Iran conflict.

The UK Decision Maker Panel (DMP) survey for August is scheduled for release today.
The 1 year ahead inflation expectations are likely to have increased to 3.1% in August, from 3.0% in July.
The 3-month inflation expectations moderated to 3.4% in July, from 3.7% in June.
Policymakers at the BOE will watch the survey closely for signals on inflation persistence risks.
Eurozone retail sales data for July are due out today; sales are likely to have increased by 1.1% y/y in July, after having increased by 0.7% y/y in June.
On a m/m basis, sales are expected to have increased by 0.2% in July, following a 0.3% decline in June.

The US ISM services PMI rose to 55.4 in August, from 54.1 in July, exceeding expectations and signalling continued expansion in the services sector.
Demand strengthened notably, with business activity rising to 61.7 and new orders climbing to 60.9, the strongest since February 2023.
Labour market conditions remained weak, with the employment index at 47.8, remaining in contraction for a second consecutive month.
Price pressures intensified, with the prices paid index increasing to 72.6, matching its highest level since August 2022.
Overall, the report pointed to solid services-sector momentum but persistent inflation pressures and subdued hiring, with tariffs and the Middle East conflict adding to cost and supply-chain concerns.

The US non-farm payrolls (NFP) for August are due out today; payrolls are expected to have increased by 55k in August, after having declined by 23k in July.
The unemployment rate is likely to have remained unchanged, at 4.1%.
Average hourly earnings growth is forecast to have slowed slightly, to around 3.1% y/y in August, from 3.2% y/y in July, indicating that wage pressures are continuing to ease.
Recent labour market indicators have painted a mixed picture.
ADP private payrolls rose by just 38k in August, well below expectations, while JOLTS vacancies and several survey-based employment indicators have also softened, suggesting a gradual cooling in labour demand.
The weakness in July NFP report has heightened the importance of the August report for assessing whether last month's decline was temporary or the start of a more sustained labour market slowdown.

Brent crude oil is currently at $95.45/bbl; ($95.52/bbl*).
Gold is at $4468/oz ($4472/oz*).
SA CDS 115bps*, Brazil 114bps* and Turkey 218bps*.
Yields: US 10yr at 4.76%*, German bund at 3.34%*, SA 10-year generic at 8.77%*, SA's R2035 at 8.56%*.

* Denotes yesterday's close.

Key events and data:

Read PDF