In the loop

What you should know this morning:

• The rand is stronger this morning, at R16.08/$, after closing weaker yesterday (R16.13/$*).
• EM currencies were mixed yesterday; the RUB (+1.5%), THB (+0.6%) and IDR (+0.5%) were the biggest gainers; the COP (-1.2%), KRW (-0.4%) and BRL (-0.4%) were the biggest losers.
• Asian equity markets are missed this morning; the Nikkei is down, while the Hang Seng and Shanghai Composite are up.

• Iran war: US Treasury Secretary Scott Bessent yesterday said that the US would soon unveil a plan aimed at economically isolating Iran and its trading partners. 
• Washington also intends to pressure US allies to support the effort, with Bessent warning that countries are “either with us or against us”.
• The shift comes after months of military strikes and a naval blockade of Iranian ports failed to force Tehran to capitulate, prompting the US to pivot from military action towards greater economic pressure.

• The UK composite PMI for August, due out today, is expected to have moderated to 51.6, from 52.2 in July.
• Retail sales for July are expected to have increased by 2.2% y/y, down from a 4.2%y/y increase in June.
• On a m/m basis, sales are expected to have declined by 0.5% in July, following a 1.0% increase in June.
• The Eurozone consumer sentiment index for August is scheduled for release today; sentiment is likely to have deteriorated to -16.0 in August, from -15.9 in July.
• The August composite PMI is likely to have slipped to 51.7, from 52.0 in July.
• The ECB's 3-year inflation expectations are expected to have remained unchanged, at 2.8%, in July.

• San Francisco Fed President Mary Daly yesterday commented that the Fed is still missing its 2% inflation target “by quite a bit” despite signs that underlying inflation pressures are gradually easing.
• She argued that monetary policy is currently in a good position and that recent inflation and labour market data have not materially changed her outlook.
• Daly noted that longer-term bond yields have been influenced by global factors.
• She stressed that the Fed remains focused on achieving its inflation objective while taking a data-dependent approach to future policy decisions.
• Although inflation remains above target, Daly expects price pressures to continue fading over time, and emphasised that there is no immediate need to alter the Fed's current stance.

• St. Louis Fed President Alberto Musalem yesterday commented that the recent bond market pressure reflects strong growth and investment, rather than concerns about the Fed's credibility.
• He stressed that monetary policy remains independent of fiscal policy, described financial conditions as relatively accommodative, and warned that inflation and elevated business costs remain key concerns.

• The US Conference Board's leading indicator rose by 0.2% m/m in July to 99.5, reversing a revised 0.1% m/m decline in June.
• The improvement was broad-based, with most components contributing positively, although weaker consumer expectations continued to weigh on the index. 
• The Conference Board expects strong business investment, particularly in AI-related activity, to support the economy, although elevated living costs are likely to constrain spending among lower- and middle-income households.

• The US composite PMI for August, scheduled for release today, is expected to have slipped, albeit remaining in expansion.
• Both the manufacturing and services PMIs are expected to have remained above the 50pt benchmark.

• Locally, it's a quiet day as far as data releases are concerned.
• Finance Minister Enoch Godongwana yesterday said that SA must achieve at least 3% annual economic growth by 2030 if it were to prevent unemployment from rising further.
• He described this as the minimum growth rate required to absorb new entrants into the labour market.
• Godongwana stressed that growth of 1% on average over the past decade has been insufficient to address the country's exceptionally high unemployment rate.
• He argued that sustaining 3% growth would support stronger job creation and improve employment outcomes.
• However, faster growth would be needed to meaningfully reduce the unemployment backlog.
• He highlighted the need to attract investment, expand infrastructure, and address electricity and logistics constraints through stronger public-private partnerships.
• The partnership aims to attract R3 trillion in investment and create one million jobs by 2030.

• Brent crude is down this morning, and up by 53.2% year-to-date.
• The gold price is up this morning, and up by 4.9% year-to-date.

• Brent crude oil is currently at $93.23/bbl; ($93.78/bbl*).
• Gold is at $4533/oz ($4516/oz*).
• SA CDS 121bps*, Brazil 125bps* and Turkey 222bps*.
• Yields: US 10yr at 4.70%*, German bund at 3.25%*, SA 10-year generic at 8.75%*, SA's R2035 at 8.54%*.

* Denotes yesterday's close. 

Key events and data:

• 08h00: UK retail sales (July)
• 10h00: Eurozone S&P Global manufacturing, services and composite PMI (August), ECB 1 yr and 3 yr inflation expectations (July)
• 10h30: UK S&P Global manufacturing, services, and composite PMI (August)
• 11h00: Eurozone negotiated wages (Q2:26)
• 16h00: Eurozone consumer confidence (August)
• 15h45: UK S&P Global manufacturing, services, and composite PMI (August)

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