In the loop 18 June 2026

In the loop

Shireen Darmalingam

What you should know this morning:

The rand is weaker this morning, at R16.32/$, after closing stronger yesterday (R16.16/$*).
EM currencies were mixed yesterday; the PEN (+0.2%), ZAR (+0.2%) and MXN (+0.1%) were the biggest gainers; the COP (-0.7%), CLP (-0.6%) and RUB (-0.5%) were the biggest losers.
Asian equity markets are mixed this morning; the Nikkei is up, while the Hang Seng and Shanghai Composite are down.

Iran war: the MoU has been confirmed to have been signed electronically by both US and Iranian leaders, and to have entered into immediate effect, formally establishing a ceasefire framework and a roadmap for negotiations.
The agreement included provisions for reopening the Strait of Hormuz, lifting the US naval blockade, allowing Iran to resume oil exports, and initiating structured talks on sanctions and nuclear issues.

Central bank watch: the US Fed FOMC unanimously kept the Fed funds rate at 3.50-3.75% for a fourth straight meeting.
The FOMC cited inflation risks from higher energy prices, while noting reduced concerns about labour market weakness.
Updated projections showed policymakers divided, with some expecting a 25 bps rate hike this year, and others favouring no change or cuts.
The Fed reiterated that inflation remains above target and that economic growth is solid.
Fed Chair Kevin Warsh said the FOMC is not providing explicit rate guidance and will remain data dependent.
He also indicated a shift towards shorter policy statements and less emphasis on tools such as the dot plot to preserve flexibility in an uncertain environment.

The BOE will meet today and is expected to keep its benchmark interest rate unchanged.
The central bank will have new CPI and labour market data before its decision.
Both releases are likely to reinforce its current wait-and-see and steady approach.
The Swiss National Bank is also expected to sit pat on rates today.

The ECB's latest wage tracker for the Eurozone indicated that wage pressures are stabilising and gradually easing, reinforcing the view that inflation risks from wages are moderating.
The forward-looking indicator continues to point to negotiated wage growth of around 2.6% by end-2026, broadly unchanged from the previous update.
The headline tracker (which smooths one-off payments) shows wage growth slowing from 3.2% in 2025, to 2.3% in 2026.
The ECB highlighted overall wage growth in 2026 as expected to remain stable and less volatile, with most measures converging around a 2.5-2.6% range over the year.

ECB Governing Council member Olaf Sleijpen said that the central bank would need to keep a close watch on inflation expectations to determine whether the inflationary impact of the Iran war is becoming more entrenched.
He noted that households' inflation expectations appear to be less firmly anchored to the ECB's 2% target than before.
He stressed that inflation expectations remain broadly aligned with the target.
However, Sleijpen cautioned that inflation expectations remain a key indicator for policymakers, and that continued vigilance is necessary to prevent temporary price shocks from becoming more persistent.

The UK April labour market data will be released today, with y/y regular private sector pay growth in the three months to April expected to moderate to 2.9% y/y, from 3.0% y/y in the three months to March.
The ILO unemployment rate is expected to remain unchanged, at 5.0%, in April.

Brent crude oil is currently at $77.68/bbl; ($79.55/bbl*).
Gold is at $4321/oz ($4256/oz*).
SA CDS 124bps*, Brazil 123bps* and Turkey 219bps*.
Yields: US 10yr at 4.48%*, German bund at 2.92%*, SA 10-year generic at 8.39%*, SA's R2035 at 8.21%*.

* Denotes yesterday's close.

Key events and data:

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