In the loop

What you should know this morning:

• The rand is stronger this morning, at R17.36/$, after closing stronger yesterday (R17.38/$*).
• EM currencies were mixed yesterday; the CLP (+1.1%), COP (+0.8%) and HUF (+0.7%) were the biggest gainers; the ARS (-0.6%), INR (-0.4%) and PEN (-0.2%) were the biggest losers.
• Asian equity markets the Nikkei, Hang Seng and Shanghai Composite are up.

• ECB President Christine Lagarde held a press conference yesterday after the central bank announced it would keep rates unchanged.
• She said the bank is in a “good place” and noted that risks to growth have eased.
• Lagarde also addressed the political turmoil in France, where the prime minister resigned this week after losing a no-confidence vote.
• Lagarde expressed confidence that policymakers would work to reduce uncertainty amid shaken investor sentiment.
• She also emphasised that the central bank stands ready to intervene if necessary.

• The US government has filed an emergency appeal after a lower court temporarily blocked President Trump from removing Lisa Cook from the Fed's Board of Governors.
• The administration is asking a federal appeals court to authorise her dismissal before next week’s policy meeting, in an effort to prevent Cook from participating in the Fed’s FOMC meeting.

• The UK economy likely stalled in July, with monthly GDP expected to show no growth, following a 0.4% m/m increase in June.
• This marks a pause in the momentum seen during the first half of the year.
• The slowdown reflects the growing impact of weaker global growth, which continues to weigh on exports and business sentiment.
• Domestic policy uncertainty, particularly around the upcoming budget, is also weighing on growth.
• Recent tax hikes have dampened consumer and business activity.
• Additionally, the boost from last year’s government spending initiatives is expected to fade in the second half of the year, further limiting growth prospects.

• The University of Michigan consumer sentiment index for September, due for release today, is expected to have slipped to 58.0, down slightly from 58.2 in August. 
• The decline is likely driven by a cooling labour market, with consumers increasingly perceiving job prospects as weakening.
• In August, 63% of respondents expected unemployment to rise over the next year, up from 57% in the previous two months, and significantly higher than the 37% recorded a year ago. 
• The Fed is expected to monitor these labour market dynamics closely as it heads into its policy meeting next week (16–17 September).
• A further deterioration in sentiment and employment expectations could strengthen the case for more aggressive rate cutting. 

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

• Brent crude is down this morning, and down by 11.7% year-to-date.
• The gold price is up this morning, and up by 39.2% year-to-date.

• Brent crude oil is currently at $65.88/bbl; ($66.37/bbl*).
• Gold is at $3655/oz ($3634/oz*).
• SA CDS 159bps*, Brazil 128bps* and Turkey 261bps*.
• Yields: US 10yr at 4.02%*, German bund at 2.65%*, SA 10-year generic at 9.47%*, SA’s R2035 at 9.36%*.

* Denotes yesterday’s close.

Key events and data: 

• 08h00: UK monthly GDP (July), industrial production (July), manufacturing production (July), trade balance (July)
• 16h00: US University of Michigan sentiment index, 1 yr and 5-10 yr inflation expectations (September)

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