In the loop

What you should know this morning:

• The rand is weaker this morning, at R16.61/$, after closing stronger yesterday (R16.57/$*).
• EM currencies were mixed yesterday; the CLP (+1.5%), MXN (+1.3%) and HUF (+0.9%) were the biggest gainers; the KRW (-0.9%), RUB (-0.9%) and ARS (-0.5%) were the biggest losers.
• Asian equity markets are mixed this morning; the Nikkei and Shanghai Composite are down, while the Hang Seng is up.

• Iran war: diplomatic efforts to end the Iran war intensified yesterday, with Tehran pushing an accelerated ceasefire proposal that could reopen the Strait of Hormuz within two days.
• President Trump signalled optimism that progress was being made, but major differences remained over Iran's nuclear programme and Tehran's conditions for a settlement.

• Central bank watch: the Reserve Bank of Australia (RBA) today raised its cash rate by 25 bps, to 4.85%, its fifth increase in 2026.
• The increase comes as persistent and increasingly broad-based inflation pressures prompted the central bank to tighten monetary policy further.
• The RBA materially raised its inflation outlook, partly reflecting higher fuel and commodity prices linked to the Middle East conflict.
• It also reflects stronger domestic capacity and cost pressures, with firms continuing to report rising input costs and price increases.
• Inflation is now expected to remain elevated through much of 2027 and not return to the top of the 2-3% target range until late 2027.

• Election watch: the US heads to the polls today, for the midterm elections, which will determine control of Congress, with all 435 seats in the House of Representatives and roughly one-third of the Senate up for grabs. 
• The elections are widely seen as a key test of the President's administration, with voters weighing economic conditions, inflation, immigration, and the direction of US policy.

• The US ISM manufacturing PMI overshot expectations in October, increasing to 55.5, from 54.5 in September, and marking a tenth consecutive month of expansion. 
• The improvement was supported by resilient domestic demand and robust investment in artificial intelligence. 
• The new orders index increased to 55.5 in October, from 55.3 in September, while the production index climbed to 59.0 in October, its highest level since November 2021. 
• The employment index eased to 52.4 in October, from 52.7 in September, while supplier delivery times continued to lengthen amid strong demand. 
• The prices-paid index declined to 75.2 in October, from 77.9in September, indicating some moderation in input cost pressures, although prices remained elevated. 

• The US JOLTS job openings data for September, due for release later today, likely increased to 7.164 million in September, from 7.079 million in August.
• The data comes ahead of the private sector ADP private payrolls report October tomorrow; private payrolls are likely to have increased by 67k in October, after having increase by 90k in September.
• Investors are also awaiting the non-farm payrolls for October on Friday; payrolls are expected to have increased by 65k in October, after having increased by 28k in September.
• The unemployment rate is likely to have remained unchanged, at 4.2%.

• Locally, President Cyril Ramaphosa, in his weekly newsletter, urged South Africans to participate in Wednesday's local government elections.
• He emphasised that voting provides an opportunity to improve service delivery, strengthen accountability and build safer, cleaner, and more prosperous communities.
• He also highlighted the importance of effective local government in providing essential services such as water, electricity, and sanitation, which are critical to improving living standards and supporting economic growth. 
• Ramaphosa acknowledged that corruption, patronage, poor financial management and inadequate service delivery has undermined public confidence in municipalities. 
• He further stressed the need for greater accountability and institutional reform. 
• It's a quiet day as far as data releases are concerned.

• Brent crude is up this morning, and up by 72.9% year-to-date.
• The gold price is down this morning, and down by 9.2% year-to-date.

• Brent crude oil is currently at $105.24/bbl; ($104.77/bbl*).
• Gold is at $3924/oz ($3958/oz*).
• SA CDS 123bps*, Brazil 145bps* and Turkey 257bps*.
• Yields: US 10yr at 4.91%*, German bund at 3.29%*, SA 10-year generic at 8.70%*, SA's R2035 at 8.52%*.

* Denotes yesterday's close. 

Key events and data: 

• 17h00: US JOLTS job openings (September), factory orders (September), durable goods orders (September)

Read PDF