In the loop

What you should know this morning:

• The rand is steady this morning, at R15.99/$, after closing unchanged yesterday (R15.99/$*).
• EM currencies were mixed yesterday; the CLP (+1.1%), BRL (+0.9%) and COP (+0.3%) were the biggest gainers; the MYR (-0.4%), INR (-0.4%) and THB (-0.2%) 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: there are no indications of either substantive peace negotiations or a revival of the earlier US-Iran memorandum that had briefly suspended hostilities.
• Both sides appear focused on coercive pressure.
• The outlook remains one of continued confrontation, heightened risks to Gulf energy infrastructure and shipping, and little immediate prospects of a negotiated breakthrough.

• China's consumer inflation for August accelerated for the first time since April, while factory-gate prices rose more than expected, signalling a pickup in price pressures.
• CPI came in at 0.8% y/y in August, up from 0.5% y/y in July.  
• PPI rebounded to 3.8% y/y in August, from 3.5% y/y in July.
• Higher food and energy costs were the key drivers of the increase.
• Prices for fresh vegetables, eggs and pork rose on a m/m basis, while energy contributed significantly to the y/y increase in headline consumer inflation.

• US consumer credit rose by $18.1bn in July, following a $14.5bn increase in June.
• Revolving credit use increased by $2.8bn in July, after rising by $6.7bn in June.
• Non-revolving credit, which includes purchases of vehicles, rose by $15.3bn in July, after a $7.8bn increase in June.
• Consumer spending has remained broadly resilient so far this year despite persistently elevated prices. 
• However, with inflation outpacing wage growth in recent months, some consumers may be increasingly relying on credit to sustain their spending.

• The NY Fed's inflation expectations for August showed that expectations were broadly stable, although expected price pressures remained elevated. 
• One-year-ahead inflation expectations were unchanged at 3.6% in August; five-year expectations held steady at 3.0%. 
• Three-year expectations edged down to 3.2% in August, from 3.3% in July. 
• Households became more concerned about the labour market, with the probability of unemployment being higher a year from now, rising to 44.4%, the highest since April 2020. Consumers also reported a deterioration in their current and expected financial situations and in access to credit.

• Investors are keeping a close eye on the US CPI for August, which is due out on Friday.
• Headline inflation is expected to have remained unchanged at 3.4% y/y in August. 
• On a m/m basis, CPI is expected to have increased by 0.4% in August, after having increased by 0.1% in July.

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

• Brent crude is up this morning, and up by 63.3% year-to-date.
• The gold price is up this morning, and down by 1.5% year-to-date.

• Brent crude oil is currently at $99.01/bbl; ($97.92/bbl*).
• Gold is at $4386/oz ($4355/oz*).
• SA CDS 115bps*, Brazil 114bps* and Turkey 218bps*.
• Yields: US 10yr at 4.78%*, German bund at 3.36%*, SA 10-year generic at 8.82%*, SA's R2035 at 8.61%*.

* Denotes yesterday's close. 

Key events and data:

• 08h00: Japan machine tool orders (August)
• 13h00: US MBA mortgage applications (4 September)

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