In the loop 27 May 2026

In the loop

Shireen Darmalingam

What you should know this morning:

The rand is stronger this morning, at R16.34/$, after closing weaker yesterday (R16.37/$*).
EM currencies were mixed yesterday; the KRW (+0.7%), CLP (+0.1%) and TWD (+0.1%) were the biggest gainers; the COP (-0.8%), RUB (-0.8%) and ARS (-0.7%) 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: despite the renewed hostilities, negotiations mediated by regional powers continued in Doha, with discussions focused on reopening the Strait of Hormuz and easing sanctions and the frozen Iranian funds.
Iranian officials signalled that they still wanted a diplomatic resolution, although Tehran warned that there would be consequences for continued US military action.

Central bank watch: the Reserve Bank of New Zealand (RBNZ) held its benchmark interest rate steady at 2.25% in a split vote decision that was only resolved by the Governor's casting vote.
The RBNZ's Monetary Policy Committee said that interest rates would most likely need to increase sooner and by more than envisaged in the February Monetary Policy Statement.
The RBNZ expects inflation to accelerate to 4.2% in Q2:26 and peak at 4.3% in Q3:26, then returning to the 2% midpoint of the target range by Q3:27.

China's industrial profits strengthened further in April, with profits at industrial firms rising 24.7% y/y, up from 15.8% y/y in March and marking the strongest increase since late 2023.
This lifted cumulative profit growth for January-April to 18.2%.

ECB Governing Council member Olaf Sleijpen noted that the ECB would do whatever is necessary to bring inflation back to its 2% target.
He added that policymakers would have much more information available by the June meeting as they assess the appropriate path for monetary policy.
ECB policymakers continue to balance inflation pressures stemming from the Iran war and higher energy costs against weaker economic growth and financial stability risks.
Eurozone inflation rose to 3% in April, well above the ECB's target.

Minneapolis Fed President Neel Kashkari noted that a prolonged war in the Middle East could force the Fed to respond with a series of interest rate hikes if higher energy prices and supply disruptions keep inflation elevated.
Kashkari commented that policymakers cannot assume that war-driven inflation pressures would prove temporary, particularly if businesses begin passing on higher costs more broadly.
He noted that the Fed's priority remains restoring inflation to its 2% target and cautioned that sustained geopolitical shocks could complicate that process.
He acknowledged that the labour market has remained relatively resilient.
Kashkari, however, stressed that the Fed would need to act decisively if inflation becomes more entrenched.

The US Conference Board's consumer confidence index slipped to 93.1 in May, the first decline after three months of gains, from 93.8 in April.
The slippage came on the back of concerns about inflation and higher fuel prices which weighed on households.
Consumers became less positive about current business conditions and the labour market.
Expectations for the next six months improved slightly.

Oil prices were mixed yesterday, although they remained below $100/bbl.
Optimism around a possible Iran peace deal that could reopen the Strait of Hormuz was offset by renewed US strikes against Tehran.
Brent crude is down this morning, and up by 61.0% year-to-date.
The gold price is down this morning, and up by 4.3% year-to-date.

Brent crude oil is currently at $97.98/bbl; ($98.11/bbl*).
Gold is at $4496/oz ($4507/oz*).
SA CDS 138bps*, Brazil 119bps* and Turkey 249bps*.
Yields: US 10yr at 4.47%*, German bund at 2.97%*, SA 10-year generic at 8.70%*, SA's R2035 at 8.52%*.

* Denotes yesterday's close.

Key events and data:

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