In the loop 21 October 2026

In the loop

Shireen Darmalingam

What you should know this morning:

The rand is steady this morning, at R16.40/$, after closing stronger yesterday (R16.39/$*).
EM currencies were mixed yesterday; the CLP (+0.6%), KRW (+0.4%) and IDR (+0.3%) were the biggest gainers; the COP (-0.5%), TWD (-0.5%) and HUF (-0.2%) 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: tensions around the Strait of Hormuz remain a key flashpoint, with Iran's Revolutionary Guard claiming that the waterway is closed.
However, the US has maintained that commercial traffic is continuing.
Meanwhile, new incidents involving Iranian naval facilities and shipping underscored the risk that the stand-off could again intensify.

BOE policymaker Megan Greene yesterday warned that progress in easing UK wage pressures has stalled.
Greene urged her colleagues to proactively address the risk of persistent inflation by increasing interest rates at their next meeting in early November.
She cautioned that the slowdown in wage growth has lost momentum, increasing the risk of second-round inflationary effects.

UK CPI for September, due out today, is expected to have increased to 3.4% y/y, from a 3.1% y/y increase August.
On a m/m basis, CPI is expected to have increased by 0.3% in September, after having increased by 0.5% in August.
Such an increase is expected to have been driven by a rise in fuel costs.
Core CPI is likely to have increased to 2.8% y/y in September, from 2.6% y/y in August.
The house price index for August is also due out today.

Locally, the main focus today will be on the Medium-Term Budget Policy Statement (MTBPS) this afternoon.
The MTBPS will likely underscore government's commitment to fiscal consolidation and debt stabilisation.
We expect Treasury to conservatively lift revenues by only about R25bn from the 2026 Budget estimates, although less conservative estimates could be twice as much.
Spending is likely to match Treasury's forecasts, implying a lower budget deficit to GDP in the current fiscal year.
Treasury has indicated that it would reveal a fiscal anchor, with the objective of ensuring future administrations staying the course.

The September CPI is also due out today and is expected at 4.7% y/y, from 4.4% y/y in August.
On a m/m basis, CPI is expected to have increased by 0.5%, after having flatlined in August.
Core CPI is projected to have remained unchanged in September, at 4.1% y/y.
Retail sales for August are due out and are expected to reflect growth of 3.0% y/y, down from a 3.4% y/y increase in July.

Brent crude oil is currently at $110.13/bbl; ($108.79/bbl*).
Gold is at $4121/oz ($4125/oz*).
SA CDS 134bps*, Brazil 117bps* and Turkey 254bps*.
Yields: US 10yr at 5.12%*, German bund at 3.40%*, SA 10-year generic at 8.92%*, SA's R2035 at 8.71%*.

* Denotes yesterday's close.

Key events and data:

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