In the loop

What you should know this morning:

• The rand is stronger this morning, at R16.35/$, after closing stronger yesterday (R16.39/$*).
• EM currencies were mixed yesterday; the COP (+0.5%), RUB (+0.5%) and BRL (+0.4%) were the biggest gainers; the HUF (-0.5%), THB (-0.5%) and INR (-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: the US and Iran signalled yesterday that neither side is ready to return to negotiations as renewed fighting entered a second week and attacks intensified. 
• The US broadened its air campaign against Iran, striking a military site near the north-western city of Tabriz, while Iran targeted US bases in Kuwait, Bahrain and Jordan.
• Washington said that it would further intensify its bombing campaign until Tehran agrees to reopen the Strait of Hormuz and halt attacks on energy tankers and other vessels using the strategically important waterway.
• Iran responded by threatening an “eye-for-an-eye” retaliation against regional energy and economic infrastructure and continued missile and drone attacks against Gulf states.

• Central bank watch: the SARB will meet today to decide on interest rates; the bank is largely expected to hike repo rate by 25 bps, to 7.25%.
• The decision, however, is likely to be a close call.
• The MPC is still likely to remain divided between raising rates to contain inflationary pressures and holding rates steady to support economic growth.
• The ECB's Governing Council is expected to leave its benchmark interest rate unchanged today, after June's hike. 
• The Central Bank of the Republic of Turkey is likely to keep its one-week repo rate at 37% today. 

• The Fed yesterday confirmed in a statement that Fed Chair Kevin Warsh would hold a press conference following next week's FOMC meeting. 
• This signals a continuation of the practice of providing immediate explanations of the FOMC's policy decision and economic assessment. 
• The post-meeting press conference is likely to be closely watched for clues on how the Fed views persistent inflation risks, the balance of risks to the economic outlook, and the potential timing of any future policy adjustments under Warsh's leadership. 
• The announcement comes amid heightened market scrutiny over the Fed's policy outlook.
• Investors are largely expecting interest rates to remain unchanged next week despite growing calls from some policymakers for further tightening.

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

• Oil prices surged more than 3% yesterday, with the Brent crude oil prices climbing above $95/bbl for the first time since 11 June. 
• The rally was driven by mounting concerns over potential supply disruptions as fighting between the US and Iran continued and threats to key shipping routes in the Gulf intensified.
• Oil prices extended their gains today after Iran-aligned Houthi militants claimed responsibility for attacks on two Saudi oil tankers in the Red Sea.
• This heightens concerns that the conflict could further disrupt crude supply and shipping through key Middle East trade routes.

• Brent crude is up this morning, and up by 57.9% year-to-date.
• The gold price is down this morning, and down by 4.4% year-to-date.

• Brent crude oil is currently at $96.07/bbl; ($94.07/bbl*).
• Gold is at $4126/oz ($4130/oz*).
• SA CDS 129bps*, Brazil 122bps* and Turkey 239bps*.
• Yields: US 10yr at 4.65%*, German bund at 3.17%*, SA 10-year generic at 8.82%*, SA's R2035 at 8.65%*.

* Denotes yesterday's close. 

Key events and data:

• 14h15: Eurozone ECB interest rate decision – no change expected
• 14h30: US initial jobless claims (18 July)
• 15h00: SA SARB interest rate decision – 25 bps hike expected
• 16h00: Eurozone consumer confidence (July)

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