In the loop 14 August 2026

In the loop

Shireen Darmalingam

What you should know this morning:

The rand is steady this morning, at R16.19/$, after closing slightly weaker yesterday (R16.20/$*).
EM currencies were mixed yesterday; the COP (+0.8%), TWD (+0.3%) and HUF (+0.3%) were the biggest gainers; the KRW (-0.3%), ZAR (-0.3%) and PHP (-0.3%) were the biggest losers.
Asian equity markets are mixed this morning; the Nikkei is up, while the Hang Seng and Shanghai Composite are down.

Iran war: the US has signalled that it is prepared to sustain its naval blockade and associated pressure measures indefinitely.
Senior US officials stated that preventing Iran from acquiring nuclear weapons and maintaining stability in global energy markets remain key objectives.
Reports suggested that mediators, including regional actors such as Oman and Pakistan, continued to explore avenues for renewed talks, but negotiations remained deadlocked.
Iran rejected suggestions that an extension of earlier ceasefire-related understandings had been agreed.

BOE Chief Economist Huw Pill yesterday said that the UK economy's resilient performance in Q2:26 strengthens the case for higher interest rates to tackle persistent inflation.
GDP grew by 0.4% q/q, putting the UK slightly ahead of the US and other major advanced economies for a second consecutive quarter. This has been reassuring for Pill that the economy is not heading into a sharp downturn.
Pill has repeatedly backed higher rates but has been outvoted by a majority of the MPC, most recently in a 6 to 3 decision to keep rates unchanged.
With inflation already well above target and expected to rise further as higher energy costs feed through to household bills, the stronger-than-expected growth data reinforces his argument for tighter monetary policy.

The Eurozone GDP data for Q2:26 (second estimate) is scheduled for release today; growth is expected to have increased by 0.4% q/q in Q2:26, after having flatlined in Q1:26.
Employment data for Q2:26 is also due out today.

Richmond Fed President Tom Barkin noted yesterday that the resilience of the US economy remains a puzzle, given years of high inflation, elevated interest rates, and geopolitical uncertainty.
Barkin said that a key reason is the continued strength of the consumer, noting that household spending accounts for nearly 70% of US GDP, and has remained surprisingly robust.
He argued that consumers have been able to keep spending because employment conditions remain favourable, with unemployment still low and the labour market continuing to support household incomes.
Barkin also noted that the economy has been supported by businesses that have adapted to uncertainty and are continuing to invest rather than delaying decisions.
While consumer sentiment has weakened and indicators have pointed to potential economic slowing, actual economic activity has proven far more resilient than expected.

US retail sales, due later today, likely increased by 0.1% m/m in July, from a 0.2% m/m increase in June, reflecting weaker vehicle sales as higher gasoline prices weighed on consumer demand throughout the month.
The FIFA World Cup likely provided some support in the first half of July, although that boost would have faded after the tournament ended on 19 July.
The University of Michigan's consumer sentiment index for August likely slipped to 54.7, from 55.2 in July.

Brent crude oil is currently at $87.20/bbl; ($87.07/bbl*).
Gold is at $4324/oz ($4350/oz*).
SA CDS 119bps*, Brazil 124bps* and Turkey 220bps*.
Yields: US 10yr at 4.68%*, German bund at 3.13%*, SA 10-year generic at 8.59%*, SA's R2035 at 8.39%*.

* Denotes yesterday's close.

Key events and data:

11h00: Eurozone GDP (Q2:26), trade balance (June), employment (Q2:26)
14h30: US retail sales (July)
16h00: US University of Michigan sentiment, 1 yr and 5-10 yr inflation expectations (August), business inventories (June)

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