In the loop

What you should know this morning:

• The rand is weaker this morning, at R16.43/$, after closing stronger yesterday (R16.41/$*).
• EM currencies were mixed yesterday; the CLP (+1.0%), ZAR (+1.0%) and MXN (+0.5%) were the biggest gainers; the BRL (-2.4%), ARS (-0.5%) and RON (-0.3%) were the biggest losers.
• Asian equity markets are mixed this morning; the Nikkei and Hang Seng are up, while the Shanghai Composite is down.

• Iran war: tensions remained elevated as diplomatic efforts failed to deliver a breakthrough and the conflict continued to disrupt global energy markets.
• Iranian officials have reiterated that Tehran would not retreat from its strategic positions.

• The Trump-Xi Summit: The talks focused primarily on trade and economic ties, with both sides signalling a willingness to pursue a more pragmatic, managed-trade approach.
• Both the US and China emphasised the importance of maintaining dialogue and preventing further escalation.
• Chinese officials describing the talks as having produced balanced and positive outcomes.
• US officials framed the summit as a step toward restoring more predictable US-China relations.

• According to the UK Royal Institution of Chartered Surveyors (RICS) UK Residential Market Survey, the headline net balance for house prices deteriorated to -34% in April, from -25% in March.
• RICS attributed the decline to the Iran war and elevated borrowing costs hitting the consumer.
• The UK GDP data for the Q1:26 is due for release today; the economy is likely to have expanded by 0.6% y/y in Q1:26, after having increased by 0.1% q/q in Q4:25.
• Monthly GDP for March is likely to reflect a 0.1% decline; this follows a 0.5% increase in February.

• The US Senate yesterday confirmed Kevin Warsh as Chair of the Fed in a 54-45 vote, marking the narrowest confirmation margin ever for a Fed chair.
• Warsh pledged to uphold the central bank's long-standing independence in setting interest rates. 
• He emphasised that monetary policy decisions would remain free from political influence. 
• However, President Trump has made clear that he expects Warsh to move quickly to lower borrowing costs.

• The Fed's annual Survey of Household Economics and Decisionmaking for 2025, released yesterday, showed rising anxiety among Americans about the labour market.
• Around 42% of adults said finding or keeping a job was a concern, up from 37% in 2024.
• Concerns about inflation also remained widespread, with roughly nine in ten respondents worried about rising prices.
• Despite these pressures, 73% of adults reported that they were either “doing okay financially” or “living comfortably” last year.
• However, financial wellbeing deteriorated among some lower-income groups. 
• The survey was conducted in October 2025, before the war in Iran triggered a surge in gasoline prices and contributed to the fastest inflation increase in years.

• Minneapolis Fed President Neel Kashkari commented that the Fed remains firmly focused on bringing inflation back to its 2% target. 
• He stressed that policymakers are “dead serious” about restoring price stability despite growing economic uncertainty.
• Kashkari noted that the US labour market appears somewhat stronger and more resilient than earlier in the year.
• He added that inflation dynamics have deteriorated, particularly due to the impact of the Iran war and higher energy prices. 
• He said the Iran conflict has “upended” the inflation environment and created significant uncertainty around the outlook.

• US retail sales for April are on the cards; sales are likely to have increased by 0.5% m/m in April, following an increase of 1.7% m/m in March.

• Locally, mining production for March is due out today; production is likely to have increased by 6.1% y/y, from 9.7% y/y in February. 
• Mining production increased by 2.3% m/m in February.

• Brent crude is up this morning, and up by 74.3% year-to-date.
• The gold price is up this morning, and up by 8.9% year-to-date.

• Brent crude oil is currently at $106.16/bbl; ($105.63/bbl*).
• Gold is at $4698/oz ($4688/oz*).
• SA CDS 149bps**, Brazil 119bps* and Turkey 233bps*.
• Yields: US 10yr at 4.46%*, German bund at 3.10%*, SA 10-year generic at 8.86%*, SA's R2035 at 8.69%*.

* Denotes yesterday's close.

Key events and data:

• 08h00: UK GDP (Q1:26), monthly GDP (March), industrial production (March), manufacturing production (March), visible trade balance (March)
• 11h30: SA mining production (March)
• 14h30: US initial jobless claims (9 May), retail sales (April), business inventories (March)

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