In the loop

What you should know this morning:

• The rand is stronger this morning, at R16.20/$, after closing stronger yesterday (R16.26/$*).
• EM currencies were mixed yesterday; the ZAR (+0.8%), HUF (+0.8%) and KRW (+0.8%) were the biggest gainers; the IDR (-0.3%), INR (-0.2%) and TWD (-0.1%) were the biggest losers.
• Asian equity markets the Nikkei, Hang Seng and Shanghai Composite are up.

• Iran war: mediators have described the talks between the US and Iran as making “positive progress”.
• Both the US and Iran have agreed to establish a communications channel to manage disputes and help preserve the fragile truce.
• However, there was little evidence of a breakthrough on the more contentious issues of Iran's nuclear programme and long-term sanctions relief, which have been deferred to subsequent negotiations.

• China's RatingDOG services PMI for June eased less than expected, to 54.1, from 54.4 in May.
• There was a marked acceleration in new exports business, employment growth was sustained, while selling prices increased.
• The composite PMI also fell in June, to 53.6, from 54.0 in May. 

• ECB President Christine Lagarde has defended the ECB's decision to raise interest rates last month.
• She noted that policymakers had acted appropriately, based on the information available at the time. 
• Lagarde remarked that, while most Governing Council members were ready to act in April, the ECB waited for additional information before moving. 
• Lagarde added that, although lower oil prices following the US-Iran peace agreement have eased inflation pressures, earlier supply shocks are still feeding through the economy.
• She noted that the ECB would remain vigilant to the risk of second-round effects.

• BOE policymaker Catherine Mann has noted that she is prepared to support an “activist” interest rate hike later this year if inflation expectations and other indicators of price pressures fail to improve.
• Mann said she supports keeping rates unchanged at 3.75%, for now.
• She warned that inflation risks are becoming embedded in the economy. 
• Mann added that she would closely monitor incoming data during the second half of the year and that she might join those calling for higher rates if inflation expectations do not ease.
• The BOE's measure of household inflation expectations currently stands at 4%, double its 2% target.

• The UK Decision Maker Panel (DMP) survey for June is scheduled for release today.
• The 3m inflation expectations are expected to come in higher, at 4.1% in June, from 4.0% in May.
• The 1 year ahead inflation expectations are likely to have moderated to 3.6% in June, from3.7% in May.
• Policymakers at the BOE will watch the survey closely for signals on inflation persistence risks. 

• Locally, the industry-wide PMI for May is due out today; the index is currently in contraction, at 49.6.

• Brent crude is up this morning, and up by 18.8% year-to-date.
• The gold price is up this morning, and down by 3.3% year-to-date.

• Brent crude oil is currently at $72.26/bbl; ($71.80/bbl*).
• Gold is at $4177/oz ($4122/oz*).
• SA CDS 126bps*, Brazil 125bps* and Turkey 221bps*.
• Yields: US 10yr at 4.48%*, German bund at 2.90%*, SA 10-year generic at 8.41%*, SA's R2035 at 8.24%*.

* Denotes yesterday's close. 

Key events and data:

• 09h15: SA S&P Global industry-wide PMI (June)
• 10h00: Eurozone S&P Global services and composite PMI (June – final)
• 10h30: UK S&P Global services and composite PMI (June – final), DMP 3m and 1 yr inflation expectations (June)
• US Public holiday

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