In the loop

What you should know this morning:

• The rand is stronger this morning, at R16.43/$, after closing weaker yesterday (R16.90/$*).
• EM currencies were mixed yesterday; the RUB (+0.6%), CZK (+0.4%) and KRW (+0.4%) were the biggest gainers; the PHP (-0.4%), IDR (-0.3%) and BRL (-0.2%) were the biggest losers.
• Asian equity markets the Nikkei, Hang Seng and Shanghai Composite are up.

• Iran war: the US and Iran have agreed to a two-week ceasefire that would also see the Strait of Hormuz open.
• Pakistan has requested that President Trump extend his deadline for bombing civilian infrastructure, and also requested that Iran reopen the Strait.
• The Islamic Republic's foreign minister has confirmed that military operations would be suspended and safe passage allowed through the waterway if the US stopped its attacks.
• Pakistan's prime minister Shehbaz Sharif invited delegations from the US and Iran to Islamabad on Friday for talks on “a conclusive agreement”.
• Iran has submitted a 10-point proposal, which Trump deemed “a workable basis on which to negotiate”.
• Trump noted that he agreed to the ceasefire because the US has “already met and exceeded” all its military objectives; he hinted at a more permanent end to the war, with a “definitive agreement” being “very far along”.
• Israel has agreed not to strike Iran during the ceasefire; however, it noted that strikes on Lebanon are likely to continue.
• Oil prices slid on the news, with the price of Brent crude falling 15%.
• The focus over the coming weeks will be on the probability of a more permanent agreement being negotiated.
• Iran's 10 points include continued control over the strait, full cessation of hostilities by the US and Isreal against Iran and its proxy groups (also in Lebanon), withdrawal of all US combat forces from the region, release of frozen Iranian assets and codifying of these demands through a binding UN Security Council resolution.
• Iran also said that it would participate in talks for a maximum of 15 days and would end the war only if its proposals were solidified in the negotiations.

• The New York Fed's Survey of Consumer Expectations showed a rise in inflation expectations over a one-year horizon in March.
• One-year ahead inflation expectations increased to 3.4%, up from 3.0% in February.
• Consumers expect fuel prices to rise 9.4% over the next year, a 5.3 ppt increase from 4.1% in February, and the highest since March 2022.
• Medical costs are expected to rise by 9.7% over the one-year horizon, and the price of a college education 9%; rent and food prices were seen to rise 7.1% and 6.0% over the next year.

• New York Fed President John Williams yesterday noted his outlook for underlying price pressures in the US as largely unchanged.
• This was despite his expectation that higher energy costs due to the war in Iran would boost overall headline inflation.
• He downgraded his forecast for US growth in 2026 to a range of 2% to 2.5%, from 2.5% to 2.75% before the war.
• Williams is less worried about the US labour market after the strong March non-farm payrolls data.
• He said that interest rates are broadly aligned with his current outlook.
• “Monetary policy is exactly where it needs to be, and then we can respond if the situation changes”, noted Williams.
• The meeting minutes of the 18 March FOMC meeting will be released tonight.

• Japan's labour cash earnings rose more than expected in February.
• Earnings increased 3.3% y/y in February, from a downwardly revised 2.5% (3.0% previously reported) in January.
• In real terms, earnings increased 1.9% y/y in February, up from 0.7% y/y in January.
• Japan current account surplus widened in February, this as the trade balance swung back into positive territory.
• The current account balance came in at ¥3.93tn, up from ¥0.93tn in January.

• Today sees the release of Eurozone retail trade sales as well as PPI inflation data for February.
• Retail sales likely contracted by 0.2% m/m in February, after falling 0.1% m/m in January.
• This would see growth of 1.6% y/y in retail sales in February, down from 2.0% in January.
• Producer prices are expected to have remained in deflation, with the PPI expected to have declined by 3.0% y/y in February (January was -2.2% y/y).

• Locally, there are no major data releases scheduled for today.

• Brent crude is down this morning, and up by 55.5% year-to-date.
• The gold price is up this morning, and up by 11.6% year-to-date.

• Brent crude oil is currently at $94.63/bbl; ($109.27/bbl*).
• Gold is at $4821/oz ($4657/oz*).
• SA CDS 183bps*, Brazil 135bps* and Turkey 287bps*.
• Yields: US 10yr at 4.29%*, German bund at 3.08%*, SA 10-year generic at 9.25%*, SA's R2035 at 9.07%*.

* Denotes yesterday's close.

Key events and data:

• 10h30: UK S&P Global construction PMI (March)
• 11h00: Eurozone PPI (February), retail sales (February)
• 13h00: US MBA mortgage applications (3 April)
• 20h00: US FOMC meeting minutes (18 March)

Read PDF