In the loop 07 October 2026

In the loop

Shireen Darmalingam

What you should know this morning:

The rand is weaker this morning, at R16.58/$, after closing stronger yesterday (R16.53/$*).
EM currencies were mixed yesterday; the HUF (+1.1%), MXN (+0.8%) and ZAR (+0.8%) were the biggest gainers; the COP (-1.3%), PHP (-0.2%) and INR (-0.1%) were the biggest losers.
Asian equity markets are mixed this morning; the Nikkei and Hang Seng are down, while the Shanghai Composite is up.

Iran war: financial markets are still sensitive to developments in this conflict, particularly the risk of further disruptions to oil exports and maritime trade.
Investors will continue to closely monitor negotiations, as any deterioration could renew upward pressure on energy prices and global inflation.

Central bank watch: investors are expected to keep an eye on the minutes of the 15-16 September US FOMC meeting, which saw the committee unanimously voting to hike the Fed funds rate by 25 bps.
The minutes are likely to show broad support for further tightening as policymakers chase swifter progress on inflation.
The Reserve Bank of India (RBI) hiked its benchmark interest rate by 25 bps, to 5.50%, today.
The increase marked the first interest rate hike in four years.
The RBI signalled that further rate hikes may be on the cards on the back of rising inflation and a weakening currency.

ECB Governing Council member Martin Kocher yesterday noted that recent increases in energy prices pose an upside risk to the region's inflation forecasts published in September.
He commented that the risks of higher inflation and weaker growth have increased.
ECB policymakers are assessing whether higher energy costs stemming from the Iran war and diesel shortages are spilling over into broader price pressures.
A more persistent pass-through could require further policy action to ensure inflation returns to the ECB's 2% target over the medium term.
Kocher said the Eurozone economy has remained broadly resilient despite geopolitical shocks and higher energy prices, although heightened uncertainty is increasingly weighing on financial markets.
He warned that geopolitical tensions, fiscal pressures, and the risk of abrupt market corrections remain key threats to financial stability.

San Francisco Fed President Mary Daly yesterday warned that surging demand for AI could create more persistent and widespread economic pressures than previously expected.
Daly said that AI demand currently shows little sign of slowing and could intensify further.
She added that upward pressure on semiconductor and other technology prices appears less like a temporary, one-off shock.
She cautioned that the impact could spread across the economy and persist longer than the Fed typically expects from supply shocks.
Daly also said she supported the Fed's decision to raise interest rates at its September meeting.

Locally, the SARB's gross and net reserves for September are scheduled for release today.
Gross reserves increased to $75.95bn in August, from $73.45bn in July, while net reserves increased to $73.69bn in August, from $71.76bn in July.

The SARB's latest Monetary Policy Review noted that the central bank will act decisively to prevent temporary inflation from becoming entrenched as risks to its outlook remain on the upside.
It noted that acting early to contain inflation is easier than trying to bring inflation under control once it has become entrenched.
Governor Lesetja Kganyago commented that the SARB would want to see inflation returning to the bank's 3% inflation objective.
The SARB would also want to see expectations anchor closer to it as soon as possible, and within the bank's two to three-year policy window.
Kganyago warned that failing to contain current price pressures could push inflation higher, further straining consumers and businesses.
This would ultimately require more aggressive interest rate increases to return inflation to target.

Brent crude oil is currently at $101.52/bbl; ($100.58/bbl*).
Gold is at $4133/oz ($4164/oz*).
SA CDS 136bps*, Brazil 107bps* and Turkey 244bps*.
Yields: US 10yr at 5.27%*, German bund at 3.47%*, SA 10-year generic at 9.01%*, SA's R2035 at 8.79%*.

* Denotes yesterday's close.

Key events and data:

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