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In the loop 29 May 2026

In the loop

Shireen Darmalingam

What you should know this morning:

  • The rand is stronger this morning, at R16.22/$, after closing stronger yesterday (R16.23/$*).
  • EM currencies were mixed yesterday; the ZAR (+0.9%), HUF (+0.4%) and PLN (+0.4%) were the biggest gainers; the THB (-0.4%), COP (-0.4%) and MYR (-0.2%) were the biggest losers.
  • Asian equity markets the Nikkei, Hang Seng and Shanghai Composite are up.
 
  • Iran war: US and Iranian negotiators have reached a preliminary framework for a 60-day extension of the ceasefire and the launching of talks on Iran's nuclear programme.
  • The proposed agreement includes provisions to reopen the Strait of Hormuz, remove mines, and address nuclear constraints, although key details remain unresolved.
  • However, the deal has not been finalised, requiring approval of the terms by US President Trump.
  • Treasury Secretary Scott Bessent said that Trump's “red lines”, including a complete end to Iran's nuclear programme, remain essential conditions for any final agreement.
 
  • The minutes of the ECB's April monetary policy meeting showed that policymakers are increasingly concerned about the inflationary impact of the Iran war and the sharp rise in energy prices. 
  • Policymakers acknowledged that inflation risks had shifted to the upside.
  • Some policymakers warned that higher oil and gas prices could trigger broader second-round effects on wages and underlying inflation. 
  • While the Governing Council kept interest rates unchanged, the discussion suggested that confidence in the disinflation process had weakened, compared with earlier in the year.
  • The minutes also revealed a growing debate within the ECB over whether monetary policy remained sufficiently restrictive. 
 
  • St. Louis Fed President Alberto Musalem said policymakers cannot rely on a potential productivity surge from AI to bring down elevated inflation. 
  • He cautioned that, after adjusting for inflation, the Fed's benchmark interest rate remains below the neutral level that neither stimulates nor restrains the economy.
  • Musalem also noted that the labour market remains stable, inflation is still “meaningfully above” the Fed's 2% target, and long-term inflation expectations appear to be drifting higher. 
  • He warned that persistent price pressures would be concerning.
  • He highlighted a scenario in which the economy could require an interest rate increase if disinflation does not materialise over the next one to two quarters.
 
  • Richmond Fed President Tom Barkin yesterday said that investment linked to AI is putting upward pressure on the neutral interest rate. 
  • He added that several AI-related factors are also contributing to inflationary pressures in the economy.
 
  • US advance goods trade balance for April is due for release today; the deficit is likely to have compressed to $87.0bn in April, from a deficit of $87.4bn in March.
 
  • Locally, the M3 and private sector credit extension (PSCE) for April are scheduled for release today.
  • PSCE is expected to have increased by 8.4% y/y in April, from 8.5% y/y in March. 
  • The April trade balance is also due for release; the trade surplus is expected to have compressed to R15.6bn in April, from a surplus of R31.9bn in March. 
  • The monthly budget deficit is expected to have widened to R73.0bn in April, from a deficit of R45.6bn in March.
 
  • There is a possibility that S&P could provide further support to financial markets at today's scheduled review of South Africa's sovereign credit rating through an upgrade.
  • However, we expect any upgrade to come only after the MTBPS later this year, which is still within the typical 12-month window in which S&P tends to resolve a positive (or negative) outlook on a sub-investment grade rating.
  • By then, the extreme uncertainty surrounding the impact of the Iran war should have subsided.
 
  • Brent crude is down this morning, and up by 52.2% year-to-date.
  • The gold price is up this morning, and up by 4.4% year-to-date.
 
  • Brent crude oil is currently at $92.59/bbl; ($93.71/bbl*).
  • Gold is at $4508/oz ($4495/oz*).
  • SA CDS 133bps*, Brazil 120bps* and Turkey 244bps*.
  • Yields: US 10yr at 4.43%*, German bund at 2.96%*, SA 10-year generic at 8.62%*, SA's R2035 at 8.44%*.
 

* Denotes yesterday's close.

Key events and data:

  • 08h00: SA M3 and PSCE (April)
  • 14h00: SA trade balance (April), monthly budget balance (April)
  • 14h30: US wholesale inventories (April)
 

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