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In the loop 05 June 2026

In the loop

Shireen Darmalingam

What you should know this morning:

  • The rand is weaker this morning, at R16.32/$, after closing stronger yesterday (R16.30/$*).
  • EM currencies were mixed yesterday; the HUF (+0.7%), RUB (+0.5%) and PLN (+0.4%) were the biggest gainers; the KRW (-0.8%), IDR (-0.5%) and MYR (-0.3%) were the biggest losers.
  • Asian equity markets are mixed this morning; the Nikkei and Hang Seng are down, while the Shanghai Composite is up.
 
  • Iran war: tensions between Israel and Lebanon have intensified despite a newly announced ceasefire framework.
  • Hezbollah rejected the agreement outright, calling it a “surrender,” and warned that it would continue resistance as long as Israeli operations persisted.
  • US officials signalled that President Trump has suggested openness to meeting Iran's leadership, while also warning that the killing of US troops could trigger a resumption of full-scale conflict.
 
  • Central bank watch: the Reserve Bank of India kept its benchmark interest rate unchanged, at 5.25%, as expected.
 
  • The UK Decision Maker Panel (DMP) survey is on the cards today.
  • Policymakers at the BOE will watch the survey closely for signals on inflation persistence risks. 
  • The report is expected to provide insight into how a third straight month of elevated energy prices is influencing business inflation expectations.
  • The 3-month ahead inflation expectations is expected to have increased to 4.0% in May, from 3.8% in April.
  • The 1-year ahead inflation expectation is expected to have moderated to 3.9% in May, from 4.0% in April.
 
  • Eurozone GDP data for Q1:26 (third estimate) is scheduled for release today.
  • GDP growth is expected to come in at 0.1% q/q in Q1:26, unchanged from the previous estimate, and from 0.2% q/q in Q4:25.
  • On a y/y basis, it is expected to come in 0.8% in Q1:26, also unchanged from the previous estimate, down from 1.2% in Q4:25.
 
  • Kansas City Fed President Jeff Schmid commented yesterday that inflation remains uncomfortably high and continues to pose a challenge for monetary policy. 
  • He noted that inflation has likely risen to around 3.5%, well above the Fed's 2% target.
  • He suggested that policymakers must decide whether to remain patient or consider further interest rate increases if price pressures persist. 
  • Schmid questioned whether the recent rise in inflation would prove temporary, and warned that the Fed may need to act if inflation does not show clearer signs of moderating. 
  • His remarks underscore ongoing concern within the Fed that inflation could remain elevated for longer than expected.
 
  • San Francisco Fed President Mary Daly remarked that AI has the potential to significantly boost productivity and support stronger long-term economic growth.
  • However, she added that the full economic effects remain highly uncertain and are likely to take time to emerge. 
  • Daly stated that AI could eventually act as a disinflationary force by improving efficiency and increasing output.
  • However, there is currently little evidence that it is having a meaningful impact on inflation, employment, or overall productivity at the economy-wide level. 
  • Daly argued that the Fed should closely monitor developments in AI adoption and productivity trends when assessing the future path of interest rates.
 
  • The US non-farm payrolls for May are due for release; payrolls are expected to have increased by 88k, after having increased by 115k in April.
  • The unemployment rate is likely to have remained unchanged, at 4.3%.
 
  • Locally, the SARB's gross and net reserves for May are scheduled for release today. 
  • Gross reserves came in at $77.09bn in April, while net reserves came in at $73.76bn in April. 
 
  • Brent crude is up this morning, and up by 56.9% year-to-date.
  • The gold price is down this morning, and up by 2.9% year-to-date.
 
  • Brent crude oil is currently at $95.47/bbl; ($95.03/bbl*).
  • Gold is at $4443/oz ($4474/oz*).
  • SA CDS 130bps*, Brazil 121bps* and Turkey 239bps*.
  • Yields: US 10yr at 4.47%*, German bund at 3.02%*, SA 10-year generic at 8.71%*, SA's R2035 at 8.52%*.
 

* Denotes yesterday's close.

Key events and data:

  • 08h00: SA gross and net reserves (May)
  • 10h30: UK DMP 3m and 1 yr inflation expectations (May)
  • 11h00: Eurozone GDP (Q1:26), employment (Q1:26 – final)
  • 14h30: US non-farm payrolls (May), average hourly earnings (May), unemployment rate (May)
  • 21h00: US consumer credit (April)
 

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