In the loop

What you should know this morning:

• The rand is stronger this morning, at R16.35/$, after closing stronger yesterday (R16.36/$*).
• EM currencies were mixed yesterday; the BRL (+1.3%), ARS (+0.9%) and CLP (+0.8%) were the biggest gainers; the RUB (-1.0%), INR (-0.6%) and THB (-0.5%) were the biggest losers.
• Asian equity markets are mixed this morning; the Nikkei and Hang Seng are up, while the Shanghai Composite is down.

• Iran war: the US yesterday reimposed a naval blockade on Iranian ports and launched further strikes against Iranian military sites near the Strait of Hormuz.
• The US argued that the attacks were aimed at degrading Iran's ability to threaten commercial shipping.
• President Trump also warned that further strikes on Iranian infrastructure could follow unless Tehran returned to negotiations.
• Trump has abandoned his plan to impose a 20% levy on cargoes through the Strait, after one day.

• Central bank watch: Fed Chairman Kevin Warsh delivered his semi-annual testimony to the House Financial Services Committee yesterday.
• Warsh told lawmakers that the Fed's overriding objective is to set monetary policy appropriately.
• He expressed confidence that, if policy were calibrated correctly, the inflation surge of the past five years would become “a thing of the past”.
• Warsh acknowledged that the labour market remains healthy but stressed that inflation is still above the Fed's 2% target.
• Warsh added that he has no preferred inflation measure but said that he is “super interested” in finding new measures to do a better job of monitoring inflation in order to help inform the Fed's decisions. 
• He is expected to deliver his testimony to the Senate Banking Committee later today. 

• The Bank of Canada is likely to hold its overnight rate target steady at the Governing Council's meeting today.

• China's economy grew by 4.3% y/y in Q2:26, down from 5.0% y/y in Q1:26, marking its weakest pace of expansion in over three years. 
• Growth fell short of expectations despite a surge in exports, supported by the AI boom and strong global demand for Chinese electric vehicles. 
• The National Bureau of Statistics said the economy remained “within a reasonable range” despite heightened external uncertainties and persistent domestic supply-demand imbalances. 
• The weaker-than-expected data may increase pressure on policymakers to accelerate fiscal support, with additional public spending and infrastructure investment expected to be discussed at the Communist Party's Politburo meeting later this month.

• China's retail sales rebounded by 1.0% y/y in June, after having declined by 0.6% y/y in May.
• The data provides some evidence that consumer spending had improved at the end of Q2:26. 
• The recovery was supported by stronger household spending and government measures to stimulate consumption.
• However, the modest pace of growth implies that domestic demand remains fragile, with weak consumer confidence continuing to weigh on broader economic activity. 

• BOE Governor Andrew Bailey yesterday warned that a sharp correction in AI-related stocks could have significant spillover effects on the UK economy.
• It could also ultimately influence the BOE's interest rate decisions. 
• While few major AI companies are listed in London, Bailey said a global market downturn would still weigh on UK economic growth. 
• He remains optimistic that AI will deliver a meaningful boost to long-term growth but cautioned that elevated valuations pose a growing risk. 
• The BOE is currently keeping interest rates on hold to contain inflationary pressures stemming from the US-Iran war.

• The US Empire State manufacturing index for July, due out today, is likely to have increased to 9.2, from 5.7 in June. 
• The PPI print for June is also due out today; PPI is expected at 6.2% y/y in June, from 6.5% y/y in May.
• The Fed's Beige Book is expected to show that economic activity expanded at a slight to moderate pace across most districts.

• Locally, it's a quiet day as far as data releases are concerned.

• Brent crude is up this morning, and up by 40.4% year-to-date.
• The gold price is down this morning, and down by 6.8% year-to-date.

• Brent crude oil is currently at $85.44/bbl; ($84.73/bbl*).
• Gold is at $4028/oz ($4052/oz*).
• SA CDS 122bps*, Brazil 124bps* and Turkey 230bps*.
• Yields: US 10yr at 4.58%*, German bund at 3.11%*, SA 10-year generic at 8.54%*, SA's R2035 at 8.38%*.

* Denotes yesterday's close.

 Key events and data:

• 11h00: Eurozone industrial production (May)
• 13h00: US MBA mortgage advances (10 July)
• 14h30: US Empire manufacturing index (July), PPI (June)
• 20h00: US Fed Beige Book (July)

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