In the loop 20 May 2026

In the loop

Shireen Darmalingam

What you should know this morning:

The rand is weaker this morning, at R16.71/$, after closing weaker yesterday (R16.69/$*).
EM currencies were mixed yesterday; the RUB (+2.2%) and COP (+0.7%) were the biggest gainers; the KRW (-1.2%), BRL (-1.0%) and RON (-0.8%) were the biggest losers.
Asian equity markets the Nikkei, Hang Seng and Shanghai Composite are down.

Iran war: President Trump has threatened to resume strikes on Iran in the coming days as part of efforts to secure a deal to end the war.
His comments once again raised the prospect of a return to active hostilities, as Iran has so far refused to comply with Trump's demands to dismantle the remaining elements of its nuclear programme.
Since a truce was agreed to on 8 April, Trump has repeatedly threatened renewed military action, then subsequently stepping back from escalation.

Central bank watch: the minutes of the 28-29 April US FOMC meeting are scheduled for release later this evening.
The minutes are likely to show that support for removing the easing bias from the statement extended beyond the three dissenters.
The minutes will provide clarity on whether the easing cycle remains on an extended pause.
Bank Indonesia is likely to hold its key rate at 4.75% today.

The UK CPI for April is on the cards today and is expected to have moderated to 3.0% y/y in April, from a 3.3% y/y increase March.
Such a moderation is likely as household energy bills are expected to have declined after measures announced in the government's 2025 budget.
In addition, the rise in services prices seen in April 2025, partly driven by policies introduced in the government's first budget in 2024, will drop out of the annual comparison base.
On a m/m basis, CPI is likely to have increased by 0.9% in April, after having increased by 0.7% in March.
Core CPI is expected to have moderated to 2.6% y/y in April, from 3.1% in March.
PPI is expected to have increased in April, to 3.0% y/y, from 2.6% y/y in March.

Philadelphia Fed President Anna Paulson has said that she favours keeping interest rates unchanged, stressing that any move towards lower borrowing costs would depend on sustained progress on inflation.
Paulson noted that, while the labour market remains stable, inflation is still too high.
She added that rate cuts would only become appropriate once policymakers are confident that inflation is easing on a sustained basis.
She also said the outlook would depend heavily on how long the Iran war continues to disrupt supply of oil and other goods.
According to Paulson, if these disruptions are resolved relatively soon, inflationary pressures and related risks should subside fairly quickly.

Locally, the April CPI is due and is expected at 4.0% y/y, from 3.1% y/y in March.
On a m/m basis, CPI is expected to have increased by 1.1%, after having increased by 0.6% m/m in March.
Core CPI is projected at 3.5% y/y in April, from 3.2% y/y in March.
March retail sales are expected to reflect growth of 2.4% y/y, up from a 1.6% y/y increase in February.

Brent crude oil is currently at $110.76/bbl; ($111.28/bbl*).
Gold is at $4468/oz ($4482/oz*).
SA CDS 152bps*, Brazil 127bps* and Turkey 248bps*.
Yields: US 10yr at 4.66%*, German bund at 3.19%*, SA 10-year generic at 9.09%*, SA's R2035 at 8.90%*.

* Denotes yesterday's close.

Key events and data:

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