In the loop 05 May 2026

In the loop

Shireen Darmalingam

What you should know this morning:

The rand is stronger this morning, at R16.81/$, after closing weaker yesterday (R16.84/$*).
EM currencies were mixed yesterday; the MYR (+0.4%), KRW (+0.2%) and TWD (+0.1%) were the biggest gainers; the COP (-2.4%), CLP (-1.3%) and ZAR (-1.2%) were the biggest losers.
Asian equity markets – the Nikkei is down.

Iran war: US President Trump yesterday expressed scepticism about the viability of Iran's proposal.
He reiterated that Iran had “not paid a big enough price,” even as Washington launched “Project Freedom” to escort commercial vessels through the Strait of Hormuz.
Tehran condemned the initiative as a ceasefire violation.

Central bank watch: the Reserve Bank of Australia (RBA) has hiked its cash rate by 25 bps, to 4.35%, as expected.
The RBA noted that inflation had picked up sharply in the second half of 2025.
Information since the start of the year has confirmed that part of the increase reflected rising capacity pressures.
The Bank also highlighted that the war in Iran has pushed up fuel and related commodity prices, adding to inflationary pressures.

ECB Governing Council member Joachim Nagel noted yesterday that the ECB may need to raise borrowing costs in June if there is no meaningful improvement in the inflation outlook.
He emphasised that the ECB's “vigilant wait-and-see approach” should not be interpreted as hesitation.
He stressed that the central bank remains ready to act as needed to safeguard price stability.
Nagel added that the June decision would hinge on updated macroeconomic projections, and that a lack of improvement in the inflation outlook would strengthen the case for a rate hike.

ECB Governing Council member Peter Kazimir has signalled an interest rate increase at the June meeting as highly likely, citing the inflationary impact of the Iran war.
He described policy tightening as “all but inevitable,” given expectations of prolonged, broad-based price pressures alongside weaker growth across the Eurozone.

New York Fed President John Williams remarked yesterday that the Fed's current policy stance appropriately balances the risks to price stability and full employment, despite “notable” supply-chain disruptions stemming from the Iran war.
He drew comparisons between these disruptions and those seen in the post-pandemic period.
He suggested that the risk of sustained inflation may be more limited this time.
Williams expects inflation to reach around 3% this year, then ease to 2% by 2027.
He projects US economic growth of between 2% and 2.25% this year and next.

The US ISM services PMI for April is due out today and is likely to have slipped to 53.7, from 54.0 in March.
New home sales for March, also due out today, likely rebounded in February and March, after falling in January; data will be released for both months.
The trade deficit is expected to have widened to $61.0bn in March, from a deficit of $57.3bn in February.
The JOLTS job openings data for March, also due for release likely slipped.
The data comes ahead of the non-farm payrolls for April, which are due for release on Friday.
Non-farm payrolls are expected to have increased by 65k in April, after having increased by 178k in March.
The unemployment rate is likely to have remained unchanged, at 4.3%.

Brent crude oil is currently at $113.27/bbl; ($114.44/bbl*).
Gold is at $4542/oz ($4521/oz*).
SA CDS 154bps**, Brazil 120bps* and Turkey 243bps*.
Yields: US 10yr at 4.43%*, German bund at 3.08%*, SA 10-year generic at 8.91%*, SA's R2035 at 8.76%*.

* Denotes yesterday's close.

Key events and data:

14h30: US trade balance (March)
15h45: US S&P Global services and composite PMI (April – final)
16h00: US ISM services PMI (April), new home sales (March), JOLTS job openings (March)
US building permits (March – final)

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