In the loop

What you should know this morning:

• The rand is stronger this morning, at R18.43/$, after closing stronger yesterday (R18.44/$*).
• EM currencies were largely up yesterday; the BRL (+2.2%), PLN (+1.0%) and ZAR (+0.9%) were the biggest gainers.
• Asian equity markets are mixed this morning; the Nikkei and Hang Seng are up, while the Shanghai Composite is down.

• The US FOMC meeting minutes of the 11-12 June meeting noted policymakers as awaiting further evidence that inflation is cooling closer to the bank’s 2% target.
• Policymakers, however, were divided on how long to keep interest rates elevated.
• The committee noted that it would not be appropriate to lower borrowing costs until additional information had emerged to give them greater confidence that inflation is on course. 
• Fed officials scaled back the number of interest rate cuts they see this year to just one.
• The minutes also highlighted the uncertainty associated with the economic outlook and with how long it would be appropriate to maintain a restrictive policy stance.

• Election watch: Britain goes to the polls today.

• The UK Decision Maker Panel (DMP) 3m and 1yr inflation expectations for June are on the cards today.
• The 3m ahead inflation expectations are likely to have moderated to 3.8% in June, from 3.9% in May.
• One-year ahead inflation expectations is likely to come in at 2.8% in June, from 2.9% in May. 

• The ECB MPC meeting minutes of the June policy meeting are due today; investors will keep an eye on the minutes for any indications on the timing of the next interest rate reduction.
• The central bank cut its benchmark interest rate by 25 bps in June; the cut marked the first interest rate cut by the ECB in five years.
• The ECB noted then that “price pressures have weakened, and inflation expectations have declined on all horizons”.
• Several ECB policymakers have expressed their preference for the central bank to keep rates unchanged at the July policy meeting.
• ECB President Christine Lagarde noted that the next interest rate cut would be data-dependent.

• Locally, electricity production and consumption for May are scheduled for release today.

• Brent crude is down this morning, and up by 12.8% year-to-date.
• The gold price is unchanged this morning, and up by 14.2% year-to-date.

• Brent crude oil is currently at $86.88/bbl; ($87.34/bbl*).
• Gold is at $2356/oz ($2356/oz*).
• SA CDS 205bps*, Brazil 164bps* and Turkey 263bps*.
• Yields: US 10yr at 4.35%*, German bund at 2.58%*, SA 10-year generic at 11.03%*, SA’s R2030 at 9.80%*.

* Denotes yesterday’s close.

Key events and data:

• 10h30: UK Decision Maker Panel (DMP) inflation 3m and 1yr inflation expectations (June)
• 13h00: SA electricity production and consumption (May)
• 13h30: Eurozone ECB monetary policy committee meeting minutes (June)
• US public holiday – Independence Day

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